Mgmt 204 SRU-1 Questions for Discussion, 05 August 2023

1. What comes to your mind when you hear monetary

policy?
used to influence the money supply, or the amount of
money in an economy. These tools are used by central banks
because they want to help manage inflation—rising prices in
an economy—and to help maximize employment

2. What is money?
Paper only. Charot. System of value that facilitates the
exchange of goods in an economy.

3. What is the effect of high interest rate on your

purchases or demand for goods?
Because higher interest rates mean higher borrowing costs,
people will eventually start spending less. The demand for
goods and services will then drop, which will cause inflation
to fall

4. What is the effect of high exchange rate (a

depreciated peso) on your purchases or demand for
goods?

5. Why do we have a central bank?

Regulating money in circulation – they are the authority for
issuing coins and notes, the money supply, and for
regulating how much money is in circulation
6. What is inflation? What causes it?
prices rise due to increases in production costs, such as raw
materials and wages. A surge in demand for products and
services can cause inflation as consumers are willing to pay
more for the product.

7. What is the relation between the inflation rate and

the unemployment rate?
when inflation rises, unemployment drops. Higher
unemployment, on the other hand, equates to lower
inflation