Monetary Policy in the Philippines

Which institution is responsible for implementing monetary policy in the Philippines?

• Bureau of Internal Revenue (BIR)

• Department of Finance (DOF)

• Bangko Sentral ng Pilipinas (BSP)

• National Economic and Development Authority (NEDA)

What is the primary function of money in an economy?

• Medium of exchange

• Source of entertainment

• Form of government revenue

• Measure of population growth

Which of the following is NOT a characteristic of money?

• Durability

• Portability

• Unlimited supply

• Divisibility

Which form of money is issued by the Bangko Sentral ng Pilipinas (BSP) and serves as the official legal tender in the Philippines?

• Commodity money

• Fiat money

• Barter system

• Cryptocurrency

Which statement best describes fiat money?

• It has intrinsic value and can be used for industrial purposes.

• It is backed by a commodity like gold or silver.

• It is government-issued money with no intrinsic value.

• It is a type of digital currency that replaces cash.

Why is divisibility an important characteristic of money?

• It allows for precise transactions of varying values.

• It ensures that money does not lose its value over time.

• It makes money more durable.

• It prevents inflation.

What is the main purpose of monetary policy?

• To control the production of goods and services

• To regulate the supply of money and interest rates in the economy

• To increase government spending

• To encourage people to save more money

In a demand-pull inflation, what monetary policy should the BSP implement?

• Expansionary policy

• Contractionary policy

• Balanced policy

• Fiscal policy

Which of the following is a tool used in contractionary monetary policy?

• Decreasing interest rates

• Increasing reserve requirements for banks

• Purchasing government securities

• Increasing government spending

If the BSP lowers the reserve requirement for banks, what will likely happen?

• The money supply will decrease.

• Banks will have more money to lend, increasing economic activity.

• Inflation will be controlled.

• Interest rates will rise.