QUIZ FOR MONETARY POLICY

Monetary Policy is a set of actions to control a nation’s overall money supply and achieve economic growth.

• True

• False

If the inflation is high, an expansionary monetary policy can address the issue

• True

• False

An expansionary monetary policy generally decreases unemployment because the higher money supply stimulates business activities that lead to the expansion of the job market.

• True

• False

Reserve requirements is a fixed term deposits with the BSP by banks and trust entities of BSP –supervised financial institutions.

• True

• False

Rediscounting is a a special refinancing facility of central banks wherein a financial institution borrows money from the BSP using promissory notes and other loan papers of its borrower as collateral.

• True

• False

The Bangko Sentral ng Pilipinas focused mainly on achieving price stability.

• True

• False

The Contractionary Monetary Policy   intends to decrease the level of liquidity or money supply in the economy.

• True

• False

The objective of the Monetary Policy is to promote a low and unstable inflation conducive to a balanced and sustainable economic growth.

• True

• False

Using its fiscal authority, a central bank can regulate the exchange rates between domestic and foreign currencies.

• True

• False

Reserve requirements is the proportion of banks deposits and deposit substitute liabilities that banks are required to hold as reserves.

• True

• False