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Monetary Policy Study Guide > Midterm Exam > Flashcards

Midterm Exam Flashcards

1
Q

BSP Primary Objective is

A

Maintain Price Stability conducived to a balanced and sustainable growth of economy and employment

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2
Q

Monetary Policy

A
  • Manage the supply and cost of money and credit,
  • influence overall demand for goods and services,
  • to attain price stability
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3
Q
  • Monetary policy - as the faucet
  • BSP -as the person who controls the faucet
  • Water - as the supply of money
A

-as the faucet
-as the person who controls the faucet
- as the supply of money

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4
Q

Too much money in economy supporting overall demand and services.
- BSP tightens the faucet to reduce money supply, dampens demand which could lead to lower inflation

A
  • Contractionary
  • Higher interest rates
  • Less lending, borrowing
  • More savings,
  • Less spending
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5
Q

too little money in the economy, dampens overall demands for goods and services,
- BSP loosens the faucet to expand money supply

A
  • Expansionary
  • Lower interest rates
  • More lending, borrowing
  • Less savings
  • More spending
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6
Q

BSP monetary policy over the years
Rehabilitation

A

 1940

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7
Q

Safeguarding towards more market determined through exchange

A

1950

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8
Q

heading toward a more market determined

A

1960-

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9
Q

stabilizing the economy

A

1970

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10
Q

Navigating through turbulent

A

 1980-

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11
Q

gaining policy

A

 1990-

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12
Q

present- moving toward inflation

A

 2000-

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13
Q

Monetary aggregate targeting

A

1985- 1995

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14
Q
  • Central bank announces growth target of monetary aggregates
  • Central bank determines the level of money supply
  • M3/ domestic liquidity serves as the money supply, base money as the operating target
A

Monetary aggregate targeting

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15
Q
  • Emphasis price stability
  • Enhanced effective monetary policy complementing monetary aggregate targeting with some form of inflation targeting
A

Modified monetary aggregate targeting 1995-2001, q3

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16
Q
  • Government sets inflation target
  • BSP assess monetary conditions
  • Inflation forecast in line with target,
    If yes, no change in policy
    If no BSP adjust policy settings
A

Inflation targeting 2002- present

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17
Q

is thecentral bankof thePhilippines. It
was established on July 3, 1993, pursuant to the provision of Republic Act 7653 or the New Central Bank Act of 1993 as amended by Republic Act 11211 or the New Central Bank Act of 2019.

A

Bangko Sentral ng Pilipinas

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18
Q

BSP Complex, Roxas Boulevard ,Manila,Philippines

A

BSP complex

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19
Q

by formulating and implementing monetary policy aimed
at influencing money supply, consistent with its primary objective to maintain
price stability,

A

Liquidity management,

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20
Q

The BSP has the exclusive power to issue the national
currency. All notes and coins issued by the BSP are fully guaranteed by theGovernmentand are consideredlegal tenderfor all private and public debts,

A

Currency issue.

21
Q

by extending discounts, loans and advances to banking
institutions forliquiditypurposes,

A

Lender of last resort,

22
Q

by supervising banks and exercising regulatory powers
over non-bank institutions performing quasi-banking functions,

A

Financial supervision,

23
Q

by maintaining sufficientinternational reservesto meet any foreseeable net demands for foreign currencies in order to preserve the international stability and convertibility of the
Philippine peso,

A

Management of foreign currency reserves,

24
Q

by determining the exchange rate
policy of the Philippines. Currently, the BSP adheres to amarket-oriented foreign exchange ratepolicy,

A

Determination ofexchange rate policy,

25
Q

which exercises the powers and functions of the BSP, such
as the conduct of monetary policy and supervision of the financial system;

A

TheMonetary Board,

26
Q

which takes charge of the formulation and
implementation of the BSP's monetary policy, including serving the banking needs of
all banks through accepting deposits,

A

TheMonetary Stability Sector,

27
Q

which enforces and monitors
compliance to banking laws to promote a sound and healthy banking system;

A

TheSupervision and Examination Sector,

28
Q

which serves the human, financial and
physical resource needs of the BSP.

A

TheResource Management Sector,

29
Q

was formally established on September 7, 1978,
to safeguard the printing, minting, refining, issuance, distribution..etc

A

The Security Plant Complex, or SPC,

30
Q

The Central Bank of the Philippines, also known as_____is the central bank of the Republic of the Philippines.The bank is committed to promoting and maintaining price stability and
providing leadership in the financial system.

A

Bangko Sentral ng Pilipinas (BSP),

31
Q

The site provides information
about BSP, monetary policy, banking supervision, payments and
settlements, loans and credit, and the country economicoperations. In addition, the site offers financial publications, research, and statistics.

A

monetary policy, banking supervision, payments and
settlements, loans and credit, and the country economicoperations

32
Q

The role of central banks in development Most developed country central banks evolved from private banks, not in a bang, but over a long period of
time

A

central banks evolved from private banks, not in a bang, but over a long period of
time

33
Q

Most historians
identify the following functions as being historically essential to the
operations of central banks:

A

(1) unifying and issuing the country’s bank
notes;
(2) acting as the government’s bank;
(3) acting as the commercial
banks’ bank;
(4) serving as a lender of last resort to the banking and even
the financial system as a whole;
(5) conducting monetary policy to manage
the foreign exchanges and the price level. Other activities have been added
to this list: (
6) conducting monetary policy to manage the overall level of
economic activity and
(7) allocating credit to promote national goals.

34
Q

There are at least three other roles of central banks that are
less considered.

A

One is the distributive role of central bank policy.
second less-known role is the political role of central banks.
the political role of central banks
A third underappreciated role is the allocative role:

35
Q

During the period of decolonization following
the Second World War, it was recognized that by promoting______central banks can play an important political role in helping to establish national sovereignty and unity.

A

Financial Unification

36
Q

refers to afinancial
institutionthat accepts deposits, offerschecking
accountservices, makes various loans, and offers basic
financial products likecertificates of deposit(CDs) and
savings accounts to individuals and small businesses.

A

commercialbank

37
Q

make money by providing and earning
interest from loans such as mortgages, auto loans,
business loans, and personal loans. Customer deposits
provide banks with the capital to make these loans.

A

Commercial banks

37
Q

have traditionally been located in
physical locations, but a growing number now
operate exclusively online.

A

Commercial banks

38
Q

are important to the economy
because they create capital, credit, and liquidity in
the market.

A

 Commercial banks

39
Q

Banks make money from

A

service charges and fees.

40
Q

Banks also earn money from

A

interest they earn by lending
out money to other clients.

41
Q

Commercial banks have traditionally been located in
buildings where customers come to

A

use teller window
services andautomated teller machines(ATMs)

42
Q

As such, commercial banks are heavily regulated by a
central bank in their country or region. For instance,
central banks impose__________on commercial
banks.

A

reserve requirements

43
Q

is another significant category of
secured lending for many banks.

A

Automobile lending

44
Q

another significant type of financing.
are, in essence, personal lines of credit that
can be drawn down at any time. Private card issuers offer
them through commercial banks.

A

cardscards

45
Q

run the proprietary networks through
which money is moved around between the shopper's
bank and the merchant's bank after a transaction.

A

Visa and MasterCard

46
Q

offers banking services to large companies and
institutional investors. They act as financial intermediaries,
providing their clients with underwriting services,merger
and acquisitionstrategies, corporate reorganization
services, and other types of brokerage services for
institutional andhigh-net-worth individuals(HNWIs).

A

investment
banking

47
Q

include individual
consumers and small businesses, investment banking
clients include governments,hedge funds, other financial
institutions,pension funds, and large companies.

A

commercial banking clients

Monetary Policy Study Guide (1 decks)

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