GROUP 4 Classification of monopoly: major currencies such as U.S. dollar, Yen and other euro.

Economic Cost - forward working cost, future cost Natural Monopoly - Single firm can supply the entire market due Targets of Monetary Policy
Opportunity Cost - Putting the source to optimum use to the fundamental cost. Monetary Aggregates - refer to the different measures of money. These
Accounting cost - Retrospective, cost only when made and properly recorded Legal Monopoly - Government grants to a private individual, firm. are deemed more directly related to the inflation rate.
Implicit Cost - Value inputs owned by firm used in production Coercive Monopoly - the producer or firm violates the principle Interest Rates - refers to a payment, expressed in percent per year made
Explicit Cost - Actual expenses of the firm of free market just to avoid competition by means of legal by borrower to a lender.
Short-Run cost analysis or illegal. Inflation Rates - refers to a rise in the average level of all prices.
T.Fixed Cost - cost do not vary w/ output 2b. Oligopoly - small number of sellers, each aware of the action of the others. Formula: CPI - Changes in Price
T.Variable Cost - vary with output Types of Oligopoly: Inflation=(CPI2-CPI1)/CPI1
Total Cost = TFC + TVC Pure Oligopoly - few seller that produce identical product. Monetary Tools of BSP
Av. Fixed cost = TFC/Quantity Differentiated Oligopoly - few sellers of same product with Open Market Operation - consist of buying and selling of overnment
Av.Variable cost=TVC/Quantity different quality. bonds.
Av. Total Cost=TC/Quantity Duopoly - only two producers exists. Reserve Requirements - reserve requirements are for the protection of
Marginal Cost=change in TC/change in Quantity Organization of Oligopoly: the depositors.
Long-Run Cost Analysis Cartel - formal aggreement between oligopolist to set-up a Discount Rate - Banks needing reserves can borrow from BSP. The
-Time period werein all fixed factors can be variable monopoly price, output and share profit among memb. interest rate charges by BSP on these loans is called Discount
LR Marginal cost =changes in LRMC/changes in output Collusion - formal or informal agreement between oligopolist to Rate.
Profit Analysis adopt a policies restricting the level of competition. Moral Suasion - ability of the BSP to persuade banks to pursue certain
Business Profit - difference between total revenue & explicit cost 3b. Monopolistic Competition - many sellers producing highly differentiated action w/out coercion.
Economic Profit - Difference b/w TR & both explicit and implicit cost products.it is a perfect competition plus product differentiation. Buying & Selling of Foreign Exchange - BSP may buy or sell foreign
Point of maximum profit 4b. Monopsony - market situation where there is only one buyer of goods and exchange at all times to maintain the international stability and
T. Revenue=Price x Quantity services in the market. convertibility of the Phpeso.
Profit=TRevenue - Tcost 5b. Oligopsony - market situation where there are small number of buyers. Selective Credit - supply and cost of money shall accord the needs of the
TR>TC - Profit country's economy.
TR<TC - loss MONETARY POLICY
TR=TC - break-even - Is one the main type of government macroeconomics policy. FISCAL POLICY
Profit of the firm in the short-run - It is the deliberate control of the money supply, credit conditioning for the - refers to the government actions that affect total government spending
-Marginal cost is equal to price purpose of achieving macroeconomic authority known as the Central Bank. activities, tax rates or tax revenue, or the government budget deficit.
Price>Av.Total Cost - earning profit Central Bank - it is an instrument which can push the economy towards equilibrium.
Price=Av.Total cost - break-even - is the central monetary authority which provides policy direction in the areas 2 Types of Fiscal Policy
Price>Av. Variable cost - can operate but not of money, credit, and banking. Automatic stabilizers - government spending or taxation actions that
profitable enough - it supervise the operation of banks and regulates the activities of non-bank take place w/out any deliberate government action.
Shutdown Point financial institutions of intermediaries. Discretionary - government spending or taxation actions that have been
Price<=Av.Variable cost or Price History of Central Bank: deliberately taken to achieve specified macroecon. goals.
- Central bank was created through R.A. Components of Fiscal Policy
GROUP 5 No. 265 “New Central Act”. Took effect Taxation - One of the 3 fundamental power of the state. The state needs
MARKET STRUCTURE on June 15, 1948. Opened for business taxation to defray its expenses and to promote equitable
MARKET - in economics, it is a place for buying and selling of goods and on 1949. distribution of wealth.
services. - During Pres. Ramos, he signed R.A. Government Borrowing - Come from international sources
-Types of goods and services No. 7653 on June 10, 1993. Government Spending - government fiscal arm producing, allocating,
-Sizes of buyers and sellers “Bangko Sentral ng Pilipinas” and distributing social goods and services.
-Degree of free flow of information Objectives of BSP: Functions of Fiscal Policy
2 Types of Market Structure - to maintain monetary stability in the Philippines. Allocational Function - process by which total resources are divided
1. Perfect Market - large number of buyers & sellers offerings a homogeneous - to preserve the international value of the peso and the convertibility of between private and social goods.
product.No firm can affect the market price. Perfect competition the peso into other currency. Distribution Function - adjustment of income and wealth to assure
Short-Run Analysis - to rise level of production, employment and income of the country. conformance with what society consider as “fair/just”.
- P=MR “Price is equal to marginal revenue” Functions of Central Bank: Stabilization Function - the use of budget policy to maintain high
- MR > MC (Expand output) Bank of currency issue - sole institution that has the power to print and employment, price level stability, and economic growth.
- MR < MC (Firm should stop producing) issue paper money & mints the coins. Import - Government spend, government loss. Economic stabilizer and to avoid
- MR = MC (Maximum profit) Acts of Government Banker Agent & Adviser - provides foreign inflation
Long-Run Analysis exchange to the government for its importing act. Export - Government profit.
- P = MR = LMC = LAC Banker's Bank - it maintains accounts for other banks. But its main
2. Imperfect Market - few sellers which is enough to affect the market function is to be the custodian of bank reserves.
price.firm become larger in connection with market size. Leader of last resort - BSP would extend assistance to the bank in
Form of IMPERFECT MARKET: desperate need of cash.
2a. Monopoly - only one seller of goods and services. Custodian of the Country's Foreign Exchange Reserves - caretaker of
reserves. International reserves include holding of gold and other
GROUP 6 Tenant Practices Excise Tax - Tax which does not poll within the 2 classification
AGRARIAN REFORM IN PH 1. Cash Tenant - pay cash as rent VAT
RA 6657 - Comprehensive Agrarian Reform Act 2. Share of Product - give the owner the share of the harvest Who bears the burden
Signed into law by Pres. Corazon Aquino 3. Cash & share of product - combination of cash & product Direct tax - tax demanded from a person whom desired for specific
Spanish Time - Lands owned by religious order or friars 4. Fixed amount of produce - fixed quantity of product service
American Time - Land reform and sold to farmers 5. Cash and fixed amount - cash and fixed quantity Indirect tax - shift burden upon someone else
Macapagal Admin - Diosdado Macapagal 1963, Land Reform code transition 6. Rent-free - consent of the landowner Determination of account
from tenancy to owned operated land Land Distribution of CARP Specific tax - person whom desired for specific service
Marcos Admin - 1972, Law amortization of 5 hectares of land planted with rice Agricultural lesser & share tenants Ad Valorem - shift burden upon someone else
and/or corn Regular Farm worker Purpose
Aquino Admin - Pres. Corazon, EO 229, Implementation of the CARP Seasonal farm worker General Tax - tax levied to individual for general public purpose
Land Reform - improvement of farmers relationship to the land they cultivate Other farm worker Special tax - particular of specific purpose
Agrarian Reform - improvement of farmers life as part of the community Occupant of public land Scope
Principle of AR Cooperative of the above beneficiaries National & Local tax
Social Justice - democratization of the income and wealth by equalizing Other directly worker on the land Exempted in tax
access to land as the basic productive resource. Regular worker - employed in the permanent basis Religious, charitable, non-profit, foreign diplomat, gov. Institution,
Just Compensation - fair market value Seasonal Farm Worker - employed in recurrent, periodic non-profit educ. Institution.
Coverage of RA 6657 Payment by the beneficiaries - annual amortization at 6% interest rate per Situs - Place of taxation
No 131 dated July 22, 1987 annum. Payment after 3 years maybe reduce. Morgaged in 3 years of Real Property
All disposable land suitable for agriculture non-payment Movable Property
Excess public domain determined by the congress Prohibition on awarded lands - cannot sell, transfer of cavey the land within 10 Double Taxation
Land owned by government suitable for agriculture years. The land can be transfer to any heir prior to the approval of DAR Direct Duplicate - tax twice by same authorities
Private land suitable for agriculture TAXATION Indirect Duplicate - tax twice by different authorities
Procedure of land acquisition -impose and demand contribution upon persons, properties for the Escape from taxation
Rewarded by DAR purpose of generating revenues for public use Shifting - forward, backward, onward
15 days of accepting or rejecting the offer Principle and theories Capitalization, transformation, evasion, avoidance, exemption
A. Bond payment of 10 years, 10% discount at the value of the land Benefit - Person should be taxed in proportion to the benefit they recieve Kind of tax
B. Direct payment in cash by the former beneficiaries Ability to Pay - taxes should relate with the peoples income or the ability to pay Nat’l tax - NIRC, Tarriff and customs, Sugar adjustment, Special
C. Other form of payment approved by PARC that is. education fund, travel tax, Private motor vehicle, energy, RA 1093, 1125, 2211,
Factor determining the just compensation Equal-Distribution - Transaction should be taxed at a fixed percentage. PD 447.
Cost of acquisition 3 structure of tax system Local tax - Local tax code, real property,tax ordinance
Current value of the property Proportional - takes money which is indirect proportion to his income Classification of individual tax
Its nature Regressive - larger percentage of persons income for tax, lower income Single - unmarried
Actual use & income Progressive - larger percentage of tax due to high salary Head - unmarried or legally separated with dependent
Sworn valuation of the landowner Significance of Taxation Married - legally or lawfully married with dependent
Tax declaration Major source of government income
Assessment of the government Equitably contribute to the wealth of the nation
Paying of Compensation To protect new industries Range Tax due = a + (b x c)
A. Cash Payment To protect local producers Over Not over Basic Add. Rate Of excess
50 hectares - 25% in cash Characteristics of Tax amount (a) (b) over ©
24-50 Hectare - 30% in Cash Enforced contribution 250,000
24-below - 35% in cash Payable in cash 250,000 400,000 .20 250,000
B. Share of stocks in the government-owned or controlled corporation Proportionate in character 400,000 800,000 30, 000 .25 400,000
C. Tax Credits Levied in person or properties 800,000 2,000,000 130,000 .30 800,000
D. LBP Bonds Levied by the state 2,000,000 8,000,000 490,000 .32 2,000,000
1.Market interest rate -91 days treasury bill rates Levied by the law making body
8,000,000 2,410,000 .35 8,000,000
2.Transferability & negotiability Levied for public purposes
Interest Payment Basic Principle of a Sound Tax System
Personal Exemption - 50, 000
Rates - interest rate on 10 years plan Fiscal Adequacy - Revenue should be sufficient to meet the expenditure
Dependent - 25,000
Dates - 6 months from date of issue and every 6 months of the government
50,000
Voluntary Land Transfer Equality - levied based on the ability of the citizen to pay
Transfer of ownership directly from the landowner to the tenant Administrative feasibility - clear and plain to taxpayer
Transfer of Stocks instead of Land Consistency - tax should be consistent with economic goal
Tranfer of stocks may be done in the form of stocks. Tenants become a Classification of Tax
stockholder Subject Matter
Personal - fixed amount upon all person reside within specified territory
Property -property located within specific territory
Range Tax due = a + (b x c)
Over Not over Basic Add. Rate Of excess
amount (a) (b) over ©
250,000
250,000 400,000 .20 250,000
400,000 800,000 30, 000 .25 400,000
800,000 2,000,000 130,000 .30 800,000
2,000,000 8,000,000 490,000 .32 2,000,000
8,000,000 2,410,000 .35 8,000,000

Personal Exemption - 50, 000

Dependent - 50,000
Inflation:
Formula: CPI - Changes in Price
Inflation=(CPI2-CPI1)/CPI1
Short-Run cost analysis
T.Fixed Cost - cost do not vary w/ output
T.Variable Cost - vary with output
Total Cost = TFC + TVC
Av. Fixed cost = TFC/Quantity
Av.Variable cost=TVC/Quantity
Av. Total Cost=TC/Quantity
Marginal Cost=change in TC/change in Quantity
Long-Run Cost Analysis
-Time period werein all fixed factors can be variable
LR Marginal cost =changes in LRMC/changes in output
Point of maximum profit
U. Revenue=Price x Quantity
Profit=TRevenue - Tcost
TR>TC - Profit
TR<TC - loss
TR=TC - break-even
Profit of the firm in the short-run
-Marginal cost is equal to price
Price>Av.Total Cost - earning profit
Price=Av.Total cost - break-even
Price>Av. Variable cost - can operate but not
profitable enough
Shutdown Point
Price<=Av.Variable cost or Price