52 Questions
Which of the following is NOT a function of money?
Measure of wealth
What is the role of trust and confidence in the modern incarnation of business?
To support currency and credit lines
How does an increase in the supply of money impact economic activity?
It stimulates increased production and employment
Which of the following is NOT included in M1?
Peso savings and time deposits
What is the term used to describe M2?
Broad Money
What does M3 include in addition to M2?
Peso deposit substitutes
What does M4 consist of?
M3 plus transferable and other deposits in foreign currency
Which of the following is NOT a factor that can contribute to overall risk in the financial system?
Technology
What is the main objective of the BSP's monetary policy?
Maintain price stability
What is the role of the BSP in promoting an efficient payments and settlements system?
Overseer, regulator, and supervisor of payment systems
What is the purpose of the National Retail Payment System (NRPS)?
To establish safe and efficient retail payment system
Which of the following is a contractionary monetary policy measure used by the BSP to reduce inflation?
Raising the policy rate
What is the main objective of the BSP's monetary policy framework?
To achieve long-run price stability
What is financial stability?
All of the above
Why is financial stability important for individuals?
All of the above
Which measure of the total money supply includes currency in circulation and peso demand deposits?
M1
Which measure of the total money supply includes M1 plus peso savings and time deposits?
M2
Which measure of the total money supply includes M2 plus peso deposit substitutes?
M3
Which measure of the total money supply includes M3 plus transferable and other deposits in foreign currency?
M4
What is the primary objective of the BSP according to the New Central Bank Act?
Maintain price stability
What is the core function of the BSP related to managing systemic risks and promoting a secure and reliable banking system?
Financial stability
What is the term used to describe the sustained increase in the general price level of goods and services?
Inflation
Which of the following is NOT a function of the BSP's monetary policy?
Regulating the banking system
What is the main objective of the BSP's financial stability function?
To enhance the resilience of the financial system
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
Why is financial stability important for individuals?
It facilitates bills payment and money transfers
What is the role of trust and confidence in the financial system?
To attract more investors
What is the process of inflation targeting by the BSP?
Government sets inflation target, BSP adjusts policy settings accordingly
What is the main objective of the BSP's monetary policy framework?
To manage inflation
Which of the following is NOT a core function of the BSP?
Risk profiling
What is the main objective of the National Retail Payment System (NRPS)?
To establish safe, efficient, and reliable retail payment system
What is the primary role of the BSP in promoting an efficient payments & settlements system?
Overseer, regulator, & supervisor of payment systems
What is the purpose of the Real Time Gross Settlement (RTGS) system?
To ensure instant settlement of payments and transfer instructions
What are the benefits of an efficient payments & settlements system?
All of the above
What is the role of the BSP in the Philippine Payments and Settlements System (PhilPaSS)?
Owner & operator of real-time gross settlement system
What is the objective of the BSP's monetary policy framework?
To maintain price stability
Who directly benefits from the BSP's efforts to promote financial stability?
All of the above
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
Which of the following is NOT a form of money in primitive societies?
Coins
What supports our modern incarnation of business?
Trust and confidence
What happens to economic activity when the supply of money increases?
It increases
What is the term used to describe the withdrawal of funds from circulation?
Deflation
What is the main objective of the BSP's monetary policy framework?
Maintain price stability
What is the purpose of the Real Time Gross Settlement (RTGS) system?
To facilitate efficient payments and settlements
How does a decrease in the supply of money impact economic activity?
It decreases
Which of the following is NOT a form of money in primitive societies?
Coins
What are the intangible qualities that support our modern incarnation of business?
Trust and confidence
What happens to economic activity when the supply of money in circulation increases?
It increases
What is the main factor that can diminish the ability of money to command commodities of like value?
Political turmoil
What is the term used to describe the money circulation used in purchasing goods and services?
Money supply
What is the impact of the withdrawal of funds from circulation on economic activity?
It decreases
What is the link between economic stability and the supply of money?
There is no link
Test your knowledge of contractionary monetary policy and its effects on the economy. Learn about the measures taken by the central bank to reduce inflationary pressures and dampen overall demand. Explore the impact of higher interest rates, increased borrowing costs, and reduced lending on the money supply and economic growth.
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