Contractionary Monetary Policy

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Which of the following is NOT a function of money?

Medium of exchange

Unit of account

Measure of wealth (correct)

Store of value

What is the role of trust and confidence in the modern incarnation of business?

To support currency and credit lines (correct)

To regulate economic activity

To determine the value of money

To establish the supply of money

How does an increase in the supply of money impact economic activity?

It stimulates increased production and employment (correct)

It results in a slowdown of economic activity

It leads to a decrease in spending activity

It causes a decrease in the cost of money

Which of the following is NOT included in M1?

Peso savings and time deposits Signup and view all the answers

What is the term used to describe M2?

Broad Money Signup and view all the answers

What does M3 include in addition to M2?

Peso deposit substitutes Signup and view all the answers

What does M4 consist of?

M3 plus transferable and other deposits in foreign currency Signup and view all the answers

Which of the following is NOT a factor that can contribute to overall risk in the financial system?

Technology Signup and view all the answers

What is the main objective of the BSP's monetary policy?

Maintain price stability Signup and view all the answers

What is the role of the BSP in promoting an efficient payments and settlements system?

Overseer, regulator, and supervisor of payment systems Signup and view all the answers

What is the purpose of the National Retail Payment System (NRPS)?

To establish safe and efficient retail payment system Signup and view all the answers

Which of the following is a contractionary monetary policy measure used by the BSP to reduce inflation?

Raising the policy rate Signup and view all the answers

What is the main objective of the BSP's monetary policy framework?

To achieve long-run price stability Signup and view all the answers

What is financial stability?

All of the above Signup and view all the answers

Why is financial stability important for individuals?

All of the above Signup and view all the answers

Which measure of the total money supply includes currency in circulation and peso demand deposits?

M1 Signup and view all the answers

Which measure of the total money supply includes M1 plus peso savings and time deposits?

M2 Signup and view all the answers

Which measure of the total money supply includes M2 plus peso deposit substitutes?

M3 Signup and view all the answers

Which measure of the total money supply includes M3 plus transferable and other deposits in foreign currency?

M4 Signup and view all the answers

What is the primary objective of the BSP according to the New Central Bank Act?

Maintain price stability Signup and view all the answers

What is the core function of the BSP related to managing systemic risks and promoting a secure and reliable banking system?

Financial stability Signup and view all the answers

What is the term used to describe the sustained increase in the general price level of goods and services?

Inflation Signup and view all the answers

Which of the following is NOT a function of the BSP's monetary policy?

Regulating the banking system Signup and view all the answers

What is the main objective of the BSP's financial stability function?

To enhance the resilience of the financial system Signup and view all the answers

What is the difference between systemic risk and systematic risk?

Systemic risk affects an entire market, while systematic risk affects a specific company or asset Signup and view all the answers

Why is financial stability important for individuals?

It facilitates bills payment and money transfers Signup and view all the answers

What is the role of trust and confidence in the financial system?

To attract more investors Signup and view all the answers

What is the process of inflation targeting by the BSP?

Government sets inflation target, BSP adjusts policy settings accordingly Signup and view all the answers

What is the main objective of the BSP's monetary policy framework?

To manage inflation Signup and view all the answers

Which of the following is NOT a core function of the BSP?

Risk profiling Signup and view all the answers

What is the main objective of the National Retail Payment System (NRPS)?

To establish safe, efficient, and reliable retail payment system Signup and view all the answers

What is the primary role of the BSP in promoting an efficient payments & settlements system?

Overseer, regulator, & supervisor of payment systems Signup and view all the answers

What is the purpose of the Real Time Gross Settlement (RTGS) system?

To ensure instant settlement of payments and transfer instructions Signup and view all the answers

What are the benefits of an efficient payments & settlements system?

All of the above Signup and view all the answers

What is the role of the BSP in the Philippine Payments and Settlements System (PhilPaSS)?

Owner & operator of real-time gross settlement system Signup and view all the answers

What is the objective of the BSP's monetary policy framework?

To maintain price stability Signup and view all the answers

Who directly benefits from the BSP's efforts to promote financial stability?

All of the above Signup and view all the answers

What is the role of the National Retail Payment System (NRPS) in the BSP's efforts to promote an efficient payments & settlements system?

Overseer, regulator, & supervisor of payment systems Signup and view all the answers

Which of the following is NOT a form of money in primitive societies?

Coins Signup and view all the answers

What supports our modern incarnation of business?

Trust and confidence Signup and view all the answers

What happens to economic activity when the supply of money increases?

It increases Signup and view all the answers

What is the term used to describe the withdrawal of funds from circulation?

Deflation Signup and view all the answers

What is the main objective of the BSP's monetary policy framework?

Maintain price stability Signup and view all the answers

What is the purpose of the Real Time Gross Settlement (RTGS) system?

To facilitate efficient payments and settlements Signup and view all the answers

How does a decrease in the supply of money impact economic activity?

It decreases Signup and view all the answers

Which of the following is NOT a form of money in primitive societies?

Coins Signup and view all the answers

What are the intangible qualities that support our modern incarnation of business?

Trust and confidence Signup and view all the answers

What happens to economic activity when the supply of money in circulation increases?

It increases Signup and view all the answers

What is the main factor that can diminish the ability of money to command commodities of like value?

Political turmoil Signup and view all the answers

What is the term used to describe the money circulation used in purchasing goods and services?

Money supply Signup and view all the answers

What is the impact of the withdrawal of funds from circulation on economic activity?

It decreases Signup and view all the answers

What is the link between economic stability and the supply of money?

There is no link Signup and view all the answers

Contractionary Monetary Policy

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Questions and Answers

Which of the following is NOT a function of money?

What is the role of trust and confidence in the modern incarnation of business?

How does an increase in the supply of money impact economic activity?

Which of the following is NOT included in M1?

What is the term used to describe M2?

What does M3 include in addition to M2?

What does M4 consist of?

Which of the following is NOT a factor that can contribute to overall risk in the financial system?

What is the main objective of the BSP's monetary policy?

What is the role of the BSP in promoting an efficient payments and settlements system?

What is the purpose of the National Retail Payment System (NRPS)?

Which of the following is a contractionary monetary policy measure used by the BSP to reduce inflation?

What is the main objective of the BSP's monetary policy framework?

What is financial stability?

Why is financial stability important for individuals?

Which measure of the total money supply includes currency in circulation and peso demand deposits?

Which measure of the total money supply includes M1 plus peso savings and time deposits?

Which measure of the total money supply includes M2 plus peso deposit substitutes?

Which measure of the total money supply includes M3 plus transferable and other deposits in foreign currency?

What is the primary objective of the BSP according to the New Central Bank Act?

What is the core function of the BSP related to managing systemic risks and promoting a secure and reliable banking system?

What is the term used to describe the sustained increase in the general price level of goods and services?

Which of the following is NOT a function of the BSP's monetary policy?

What is the main objective of the BSP's financial stability function?

What is the difference between systemic risk and systematic risk?

Why is financial stability important for individuals?

What is the role of trust and confidence in the financial system?

What is the process of inflation targeting by the BSP?

What is the main objective of the BSP's monetary policy framework?

Which of the following is NOT a core function of the BSP?

What is the main objective of the National Retail Payment System (NRPS)?

What is the primary role of the BSP in promoting an efficient payments & settlements system?

What is the purpose of the Real Time Gross Settlement (RTGS) system?

What are the benefits of an efficient payments & settlements system?

What is the role of the BSP in the Philippine Payments and Settlements System (PhilPaSS)?

What is the objective of the BSP's monetary policy framework?

Who directly benefits from the BSP's efforts to promote financial stability?

What is the role of the National Retail Payment System (NRPS) in the BSP's efforts to promote an efficient payments & settlements system?

Which of the following is NOT a form of money in primitive societies?

What supports our modern incarnation of business?

What happens to economic activity when the supply of money increases?

What is the term used to describe the withdrawal of funds from circulation?

What is the main objective of the BSP's monetary policy framework?

What is the purpose of the Real Time Gross Settlement (RTGS) system?

How does a decrease in the supply of money impact economic activity?

Which of the following is NOT a form of money in primitive societies?

What are the intangible qualities that support our modern incarnation of business?

What happens to economic activity when the supply of money in circulation increases?

What is the main factor that can diminish the ability of money to command commodities of like value?

What is the term used to describe the money circulation used in purchasing goods and services?

What is the impact of the withdrawal of funds from circulation on economic activity?

What is the link between economic stability and the supply of money?

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