the monetary system-jm

8/18/2019 The Monetary System-JM

1/15

The Monetary

System


2/15

The Meaning of

MoneyMoney- The set of assets in aneconomy that people regularly use tobuy goods and service from other

people.


3/15

The Functions of

Money• Medium of Exchange- An item that buyers give tosellers when they want to purchase goods andservices.

• Unit of Account- The yardstick people use to postprocess and record debts.


4/15

The Functions of

Money• tore of !alue- An item that peoplecan use to transfer purchasing powerfrom the present to the future.


5/15

The Kinds of Money• "ommodity Money- Money that takes

the form of a commodity withintrinsic value.


6/15

The Kinds of Money• #iat Money- money without intrinsic

value that is used as money becauseof government decree.


7/15

Money in PhilippineEconomy

• Money tock- The $uantity of moneycirculating in the economy.

%. "urrency-The paper bills and coins in

the hands of the public.

&. 'emand deposits-(alances in bankaccounts that depositors can access

on demand by writing a check.


8/15

The Banko Sentral ngPilipinas

• (anko entral ng )ilipinas- The centralbank of the )hilippines.

• "entral bank- An institution designed to

oversee the banking system and regulate the$uantity of money in the economy.


9/15

The BSP Organization


10/15

BSP Jo• *egulation of banks to ensure the

health of the nation+s bankingsystem.


11/15

BSP Jo• "ontrol the $uantity of money

available in the economy.


12/15

Monetary Policy• Money upply- The $uantity of

money available in the economy.

• Monetary )olicy- The setting ofmoney supply by policymakers in thecentral bank.


13/15

Tools of Monetary!ontrol

• ,pen Market ,perations Thepurchase and sale of governmentbonds.


14/15


• *eserve *e$uirements *egulationson the minimum amount of reservesthat banks must hold against

deposits


15/15


• 'iscount *ate The interest rate onthe loans that () makes to banks.

the monetary system-jm

Documents