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Question Scenario 29-1. The monetary policy of Namdian is determined by the Namdian Central Bank. Th

Question Scenario 29-1. The monetary policy of Namdian is determined by the Namdian Central Bank. Th

Question

Scenario 29-1.

The monetary policy of Namdian is determined by the Namdian Central Bank. The local currency is the dia. Namdian banks collectively hold 100 million dias of required reserves, 25 million dias of excess reserves, 250 million dias of Namdian Treasury Bonds, and their customers hold 1,000 million dias of deposits. Namdians prefer to use only demand deposits and so the money supply consists of demand deposits.

Refer to Scenario 29-1. Suppose the Central Bank of Namdia loaned the banks of Namdia 5 million dias. Suppose also that both the reserve requirement and the percentage of deposits held as excess reserves stay the same. By how much would the money supply of Namdia change?

40 million dias

60 million dias

50 million dias

40 million dias

None of the above is correct.

Explain why the answer is C please

 

Scenario 29-1.

The monetary policy of Namdian is determined by the Namdian Central Bank. The local currency is the dia. Namdian banks collectively hold 100 million dias of required reserves, 25 million dias of excess reserves, 250 million dias of Namdian Treasury Bonds, and their customers hold 1,000 million dias of deposits. Namdians prefer to use only demand deposits and so the money supply consists of demand deposits.

Refer to Scenario 29-1. Suppose the Central Bank of Namdia loaned the banks of Namdia 5 million dias. Suppose also that both the reserve requirement and the percentage of deposits held as excess reserves stay the same. By how much would the money supply of Namdia change?

Selected Answer:

Correctc.

40 million dias

Answers:

a.

60 million dias

 

b.

50 million dias

 

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40 million dias

 

d.

None of the above is correct.

Explain why the answer is C please

 

manish jayant 22-Apr-2020

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