Monetary Policy

Question 1

What are the forms/characteristics of money

Answer 1

1. Medium of exchannge
   Universally accepted eans of payments
2. Store of value
   Does not depriciate but it does change in ourchasing powerr
3. Unit of account
   Common standard for measuring/ commin denominator
4. Stabdard deffered oayment
   Can be used in future trabsactions like loans which are monetary terms

Question 2

First coin used by ancient filipinos

Answer 2

Gold barter ringa

Question 3

First paper money by el banco espaniol filipino whom is the furst cebtral bank

Answer 3

Peso fuertes

Question 4

Current medium of exchange

Answer 4

Philippines peso or paper mkney

Question 5

Differenr forms of miney

Answer 5

1. Commodity miney
   - physical goods

2, diat miney
- gov, issued currency

3. Credit mkney
   - future monetary claims like ious, bknds

4, p plastic money
- hard plastuc cards like debut and credit cards

Question 6

Central monetary authority in the ph

Answer 6

Bangko central ng pilipinas

Question 7

Posses fiscal and logistical autonomy from the gov. In the execution pf its mandated obligations

Answer 7

Bangko sentral ng pilipinas

Question 8

What are the functions and responsibility of BSP

Answer 8

1. Regulate the money supply in the economy
2. Issue pesos bills in exchange for foreign currency
3. Safe depository of publicnfunds
4. Imposes reserve requirement sytem among banks
5. Controls and decides whether to lend moneyy to the national gov.

Question 9

What is monetary poolicy for?

Answer 9

Stabalize inflation rate and have balanced economic growth

Question 10

What is the main goal of expansionary monetary policy

Answer 10

1. Increase in money supply
   2, lower interest rates
   3, stimulate investments
   4, increae in aggregate demands

Question 11

What are the three methods jn expansionary monetary policy?

Answer 11

1. Decreasing reserves
   Allowas commercial banks to lend more through lowns, stimulatung consumption expenditure and aggregate demand

2, lowering discount rates
Encourages central bankds and institutions to borrow, increasing funds available for lending, thereby purchasing power and consumption expenditure. As individuals a
Can borrow money easier

3. Open market operations (. Purchase treasury bonds
   Pressure banks to release more money into the economy leading consumption expenditure and aggregate demand thereby increasing consumption

Question 12

What are the three methods in contractionary monetary policy?

Answer 12

1. Increasing reserves
   Reduce money supply through making borrowjng money on banks harder, leading to decrease consumption and eventually lower prices
2. Raising discount rates
   Discourage borrowingt hrought increasing interest rates , reducing funds available for lending and consumptiom

3, open market operations ( selling bonds)
Widthraw money from the system, sell bonds to decrease consumer’s spending thereby lowering down economic activity

Question 13

What are the goals of contractionary monetary policy?

Answer 13

1, reduce money suppky
2, increase in interest costs
3. Fewer investmebts and aggregate demand