Question

Analyses and Reflection of the effects of the Monetary Policy

                    formulated in the Philippines on inflation, purchasing power

                   of the peso, fiscal policy, does it produce a stabilize economic

                   growth for the country?

2. How would you compare the monetary policy formulated in Indonesia

     compared to the Philippines/

3. Based on your opinion, which have a better and productive effects

     in attaining country's development or consistent growth.

Answer 1

Question 1 ) Analysis and reflection ...........for the country.

money supply by a central bank, such as the Federal Reserve Board in the United States of America, and the Bangko Sentral ng Pilipinas in the Philippines. This is used by the government to be able to control inflation, and stabilize currency. Monetary Policy is considered to be one of the two ways that the government can influence the economy – the other one being Fiscal Policy (which makes use of government spending, and taxes).^[1] Monetary Policy is generally the process by which the central bank, or government controls the supply and availability of money, the cost of money, and the rate of interest

Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you would be able to purchase.

In investment terms, purchasing power is the dollar amount of credit available to a customer to buy additional securities against the existing marginable securities in the brokerage account. Purchasing power may also be known as a currency's buying power.

Monetary policy and fiscal policy refer to the two most widely recognized tools used to influence a nation's economic activity. Monetary policy is primarily concerned with the management of interest rates and the total supply of money in circulation and is generally carried out by central banks, such as the U.S. Federal Reserve.1 Fiscal policy is a collective term for the taxing and spending actions of governments. In the United States, the national fiscal policy is determined by the executive and legislative branches of the government.

• Both monetary and fiscal policy are macroeconomic tools used to manage or stimulate the economy.
• Monetary policy addresses interest rates and the supply of money in circulation, and it is generally managed by a central bank.
• Fiscal policy addresses taxation and government spending, and it is generally determined by government legislation.

The contribution that monetary policy makes to sustainable growth is the maintenance of price stability. ... A monetary policy decision that cuts interest rate, for example, lowers the cost of borrowing, resulting in higher investment activity and the purchase of consumer durables.

Question 2) How would.......to philipines.

The goal of Bank Indonesia is to achieve and maintain the stability of the rupiah. This goal is stipulated in article 7 of Act No. 3 of 2004 concerning Bank Indonesia.

Rupiah stability is defined, among others, as stability of prices for goods and services reflected in inflation. To achieve this goal, Bank Indonesia decided in 2005 to adopt the inflation targeting framework, in which inflation is the primary monetary policy objective, while adhering to the free floating exchange rate system. Exchange rate stability plays a crucial role in achieving price and financial system stability. For this reason, Bank Indonesia also operates an exchange rate policy designed to minimise excessive rate volatility, rather than to peg the exchange rate to a particular level.

To carry this out, Bank Indonesia holds powers to conduct monetary policy through the establishment of monetary targets (such as money supply or interest rates) with the primary goal of keeping inflation at the government-prescribed level. On the operational level, these monetary objectives rely on the use of instruments, including open market operations on the rupiah and forex money markets, setting the discount rate, prescribing a minimum reserve requirement and regulating credit or financing. Bank Indonesia may also apply monetary controls based on Sharia Principles.

The BSP's main responsibility is to formulate and implement policy in money, banking and credit, with the primary objective of maintaining stable prices conducive to balanced and sustainable economic growth. The BSP also aims at promoting and preserving monetary stability and the convertibility of the Philippine peso.

Question 3) Based on your............consistent growth

In examining the effects of monetary policy on economic activity and growth, it is useful, both for conceptual and for policy reasons, to distinguish between long-term and short-term effects or, alternatively, between permanent and transitory effects. I will begin by considering whether and how monetary policy may influence economic growth in the long run, reviewing first the theoretical arguments on the links between monetary expansion, inflation and economic growth, and then assessing the available empirical evidence.