ECONOMICS

CHAPTER 3 - a process or means by which the

sovereign, through its law-making body, raises
ECONOMIC POLICIES
revenue to defray the necessary expenses of
government.

Bangko Sentral ng Pilipinas - an agency of the -tool to supply of money in the

government responsible in implementing economy. It is an instrument to manipulate the
policies pertaining to money supply. conditions in the economy.

Monetary Policy - refers to actions that the

Bangko Sentral takes in order to change the
equilibrium of the money market.

TOOLS OF MONETARY POLICY

1. Required Reserves - the BSP decides what

the lending behavior of the commercial banks
should be.

2. Rediscounting - the BSP enjoys another

prerogatives from being the bankers of banks.

3. Open Market Operations - the BSP actively

participate in the purchase and sale of
government securities in active money market

4. Selective Credit Control - the BSP selects the

kind of credit it will give to clients

5. Moral Suasion - tries to test the persuasive

ability of the Chariman of Monetary Board and
Governor of the BSP.

Government - vital agent for increasing the

productivity of the different sectors of the
economy.

Fiscal Policy - according to Villegas and Abola, it

is necessarily concerns itself with the
manipulation of the inflows and outflows of the
government sector.

- an instrument which can push the

economy towards equilibrium

Taxation - inherent power of the State,acting

through the legislature.

- act of laying at tax