week 4 Flashcards
- is anything that is widely used for making payments and accounting for debts and credits.
- has changed from gold/silver coins to paper currency to electronic funds.
- Cash can be obtained from an ATM any where in the world.
- Bills are paid and transactions are checked online
Money
- is a formal obligation that entitles one party to receive payments and/or a share of assets from another party.
- are assets that can be traded, or they can also be seen as packages of capital that may be traded
Financial instruments
Places or networks where financial instruments can be sold quickly and cheaply.
Financial Markets
Firms that provide savers and borrowers with access to financial instruments and financial markets
Financial Institutions
is a large financial institution that handles the government’s finances, regulates the supply of money and credit in the economy, and serves as the bank to commercial banks
Central banks
- affects the value of financial instruments
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Time has value
Time has value
In a world of uncertainty, individuals will accept risk only if they are compensated.
Risk requires Compensation
refers to potential financial losses, because of unwanted events.
Risk
- In a world of uncertainty, individuals will accept risk only if they are compensated.
- In the financial world, compensation comes in the form of explicit payments: the higher the risk the bigger the payment.
Risk requires compensation
We live in a world of imperfect information.
For financial transactions to take place parties must have adequate information.
The more important the decision, the more information we gather.
Information is the basis for decisions
Markets are the core of the economic system.
Markets channelize resources
And minimize the cost of gathering information and making transactions.
Markets determine Prices and Allocate Resources.
A stable economy reduces risk and improves everyone’s welfare.
The central banks are now expected to keep inflation low and stable, and also to avoid or minimize recessions
Stability improves welfare.
the first known coin to have been minted in this country.
Spanish barrila
Other foreign and domestic banks were opened during the American era including American Bank which operated for four years
1901
The Wai Hung Bank and the Abrue Newberry and Reyes Bank both founded
1902
the first provincial banks, Bank of Pangasinan
1904-1906
Bank of Zamboanga
1904-1908
At the time of American occupation, the currency in the Philippines are the ff:
- Mexican dollar or peso
- Spanish Filipino silver peso
- Filipino silver peseta (1/5 of a peso termed as salapi)
- Filipino silver half peseta- (1/10 of a peso termed as kalahati)
- Filipino copper centavo- (1/100 of a peso termed as isang centime
- Filipino copper half centavo- termed as isang pirita
– The entry of the Japanese Imperial forces in Manila Place the operation of the —- existing banks at a standstill
17 existing banks at a standstill
the unit of value is the theoretical gold peso containing 12.9 grains of gold and a silver peso containing 416 grains of silver. what philippine act it is?
the Philippine Coinage Act of 1903
Money issued and circulated during Japanese Occupation.
Mickey mouse notes or mickey mouse money
who was established in 1594 represented the first organized financial institution in the Philippines.
Obras Pias
is now the Philippines’ central monetary authority that provides policy directions in the areas of money, banking and credit.
The Bangko Sentral ng Pilipinas
The Bangko Sentral ng Pilipinas (BSP) was created by the
Republic Act No. 7653, OR New Central Bank Act of 1993.
