This system consists of the aggregate of money in use and the values of the various types of money being organically related to one another in both formal and substantive ways.

In a system, THERE IS ________ and _______ and every type of money is either a multiple or sub-multiple of that unit, that is, there are various denominations. There is also provision for converting one type of money into another or redeeming fiduciary money by standard money on parity or other basis.

The monetary system of a country is a __________. The central government usually acquires a monopoly or near control of monetary affairs, minimizing state and local differences and facilitating production and trade on a national basis. Each country enacts its own coinage, banking, and other monetary legislation.

The monetary system in a country is DETERMINED BY ____. Laws are passed from time to time, adding new types of money or modifying existing types to meet special emergencies of a financial or political character.

Chief determinant in the selection of the monetary standard is _________________________________________. This criterion is very important in the choice between a full-bodied metallic standard money and a fiduciary standard money as well as the choice of the fiduciary standard money that may be used by the particular country.

This is more frequently used to signify the constancy of its purchasing power over goods in general. This use of stability does not imply that the unit of money has equal command at all times over any particular commodity, such as grains or service. It does mean that the average price of all goods is constant and that the unit of money will buy the same amount of all commodities.

Stability of money value, therefore, refers to ___________________________ over a considerable list of commodities or services used as a sample. If the average price remains constant, the assumption is that the purchasing power of money has stayed constant while the prices of the individual commodities on the list may have varied considerably in amount and direction.

Another concept of stability of money is its ____________________ in foreign markets, that is, the exchange rate between the Philippine peso and the currencies of foreign countries.

This is the monetary system in which the monetary unit is kept at par with a fixed weight or value of gold. Money was backed up by gold coins and gold bullion. Stability of money value and exchange rates were observed under this standard because of fixed gold value.

- Monetary unit is defined in terms of coins containing a certain amount of gold with prescribed purity of fineness. - Gold coins were an alloy of gold and other base metals. Such coins are referred to as nine-tenths fine. - It was also legal to melt down gold coins of any quantity. - Gold presented to the mint was made into coins at little or no cost to the supplier of metal.

- All gold is under the control of government, which decreased the demand for gold and made it possible to use a larger amount of money on the same gold base. - This gives monetary authorities more flexibility in regulating the money supply and makes international monetary management easier. - This transition from gold coin standard to gold bullion standard marks a decided change in the concept of the gold reserve. It is no longer designed to meet withdrawals for domestic circulation but merely for exports or the arts.

- Under this system, the money of a country is redeemable, not in gold, but in currency of a foreign country. - Philippine money was then redeemable in dollars to which the Philippine government had a claim because it had deposits in American banks. - The gold exchange standard was born from some experiments in sterling rupee exchange, the pound sterling, gold, and the Indian rupee silver. In the early part of the twentieth century, it was  frequently used between parent countries and their colonies as well as between older countries and newly developed countries.

Using both gold and silver in coinage, this monetary standard provides for a broader metallic base if there is a shortage of gold. Thus, the purchasing power of money is more stable due to non-dependence on a single metal value. Government freely coins both metal and makes them available in the quantities required. - This standard illustrates ___________ which states that, “when several types of money exist in an economy, the one which is overvalued as money in relationship to the others will circulate while the others will disappear from circulation”.

This is based upon the assumption that it is desirable to use both metals simultaneously as the standard of value.

This is a monetary system in which the face value of money is higher than the value of materials used for coinage.

Under this standard, the SEAL of the government and the mark LEGAL TENDER make money acceptable as payment for goods and services.

- It emerged when the government was unable to redeem money under the gold standard and accepted paper money as another form of legal tender. - The inconvertible paper standard accepts paper bills as a medium of exchange, and these are interconvertible with other denominations of money on demand.

- The _____________ makes use of inconvertible paper money that is irredeemable because it was issued against no reserve. - In 1949, the Philippine was on a managed currency system. This was the time that the country’s monetary system came under the administration of the Central Bank of the Philippines.

• ________________ is a monetary standard where the medium of exchange is a currency that has its value tied to a commodity. It is a full-bodied money because it is one hundred backed-up by gold or silver reserves. • It may either be monometallic or bimetallic.

➢ Is a one-metal standard whereby a country uses either gold or silver as a standard unit of value. ➢ Divided into gold standard and silver standard.

➢ Is a two-metal standard whereby gold and silver are used as a standard unit of value. ➢ May also be defined as a monetary system in which coins of two different metal at a fixed ratio of weight and fineness are used as the monetary unit or standard unit of value.

• This refers to a monetary system in which the face value of the monetary unit is much higher than that of the value of the material used as money.