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AE > WEEK 1 > Flashcards

WEEK 1 Flashcards

1
Q

Any item or commodity that is generally accepted as a means of payment of goods and services.

A

MONEY

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2
Q

anything good/service can be exchanged by two consenting parties for the acquisition of their desired commodity.

A

Barter System

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3
Q

4 Functions of Money

A

Medium of Exchange
Unit of Account
Store of Value
Standard of deferred payment

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4
Q

It is generally acceptable in exchange for goods and services without the need for a barter system.

A

Medium of Exchange

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5
Q

Serves as the yardstick in measuring the value of commodities in the exchange of process.

A

Unit of Account

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6
Q

It is durable for exchange later.

A

Store of Value

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7
Q

It becomes a standard of payments of debts or contracts in which
payments are to be made for the future.

A

Standard of deferred payment

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8
Q

The Central monetary authority provides monetary policy direction that coversthe areas of money, credit, and banking. It also supervises the operation of banks and regulates the activities of non-bank
financial institutions or intermediaries. Regulates and controls the use of currency.

A

Bangko Sentral ng Pilipinas (Central Bank of the Philippines)

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9
Q

Three main pillars:

A

Price Stability
Financial Stability
Efficient payments and settlement systems

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10
Q

refers to the condition of low and stable inflation rate.

A

Price Stability

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11
Q

make sure bank and nonbank financial institutions follow prudential rules and regulations.

A

Financial Stability

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12
Q

guarantees that settlement of financial transactions is safe,
timely, and accurate.

A

Efficient payments and settlement systems

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13
Q

12 Features of Money

A
  1. Acceptability
  2. Stability of Value
  3. Divisible
  4. Durability
  5. Storability
  6. Cognizable
  7. Portability
  8. Uniformity
  9. Homogenous
  10. Economical
  11. Difficult to duplicate
  12. Malleability
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14
Q

commonly accepted for the sale and purchase of goods and services.

A

Acceptability

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15
Q

interconvertibility of currency.

A

Divisible

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16
Q

should not deteriorate abruptly.

A

Durability

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17
Q

store of value should not depreciate promptly.

A

Storability

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18
Q

easily recognized.

A

Cognizable

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19
Q

transportable

A

Portability

20
Q

same value for the equal denomination

A

Uniformity

21
Q

same quality and quantity

A

Homogenous

22
Q

the good money material has economical quality

A

Economical

23
Q

applies only to coins wherein can be liquidated or re-coined

A

Malleability

24
Q

4 Types of Money

A
  1. Currency in Circulation
  2. Demand Deposits
  3. Traveler’s Check’
  4. Other Checkable Deposits
25
Q

total coins and bills moving in the economy

A
  1. Currency in Circulation
26
Q

bank accounts allow money to be withdrawn from the available balance

A
  1. Demand Deposits
27
Q

medium of exchange utilized as a substitute to hard currency

A
  1. Traveler’s Check
28
Q

access their funds held by writing checks or drafts

A
  1. Other Checkable Deposits
29
Q

refers to the rate of change in the average prices of goods and services typically purchased by consumers.

A

INFLATION

30
Q

3 Kinds of Inflation

A
  1. Hyperinflation
  2. Deflation
  3. Disinflation
31
Q

high rate of inflation

A
  1. Hyperinflation
32
Q

sustained decrease in the price level

A
  1. Deflation
33
Q

reduction in the rate of inflation

A
  1. Disinflation
34
Q

3 Consequences of Inflation

A
  1. Adverse effect on production
  2. Obstacle to development
  3. Changes in Relative Prices
35
Q

2 Measures of Inflation

A
  1. Monetary Policy
  2. Fiscal Policy
36
Q

refers to the control of monetary authority to the money supply in order to influence the desired level of liquidity in the economy.

A
  1. Monetary Policy
37
Q

refers to government actions that affect the total government spending activities, tax rate or tax revenues, or the government budget deficit.

A
  1. Fiscal Policy
38
Q

3 Causes of Inflation

A
  1. Demand-Pull Inflation
  2. Cost-Push Inflation
  3. Structural Inflation
39
Q

sustained rise in the price level caused by an increase in aggregate demand.

A
  1. Demand-Pull Inflation
40
Q

increase in the cost of production that results in a fall in aggregate supply.

A
  1. Cost-Push Inflation
41
Q

excess demand oversupply due to the government’s monetary policy.

A
  1. Structural Inflation
42
Q

Price at which one currency can be exchanged for another.

A

EXCHANGE RATE

43
Q

7 Determinants of Exchange Rate

A
  1. Differentials in inflation
  2. Differentials in interest rates
  3. Current account deficits
  4. Public Debt
  5. Terms of trade
  6. Political Stability
  7. Economic Performance
44
Q

3 Exchange Rate Regimes

A
  1. Floating
  2. Fixed
  3. Managed
45
Q

currency allowed to move freely up and won according to changes in demand and supply

A
  1. Floating
46
Q

allows the exchanged rate to move within the range of values and permits the rate to fluctuate within the range.

A
  1. Fixed
47
Q

the monetary authority intervenes in the market to smooth out short-run fluctuations without affecting the long-run movement if the exchange rate.

A
  1. Managed

AE (4 decks)

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