Question: Macro Topic 4.6 Monetary Policy Part 1-Practice- For the following questions, assume that banks lend out all excess reserves and that all cash is

Macro Topic 4.6 Monetary Policy Part 1-Practice- For the following questions, assume

 

Macro Topic 4.6 Monetary Policy Part 1-Practice- For the following questions, assume that banks lend out all excess reserves and that all cash is redeposited into the banking system and the reserve requirement is 10%. "Note"- This is essentially 14 versions of the same question, but notice how small differences impact the answer. 1. If Kaci finds $1,000 under her bed and deposits in a bank, what is the immediate change in the money supply? 2. If Kaci finds $1,000 under her bed and deposits in a bank, what is the immediate change in checkable bank deposits (demand deposits)? 3. If Kaci finds $1,000 under her bed and deposits in a bank, what is the immediate change in the required bank reserves? 4. If Kaci finds $1,000 under her bed and deposits in a bank, what is the immediate change in the bank's excess reserves? 5. If Kaci finds $1,000 under her bed and deposits in a bank, what is the total maximum change in the money supply? 6. If Kaci finds $1,000 under her bed and deposits in a bank, what is the total maximum change in checkable bank deposits (demand deposits)? 7. If Kaci finds $1,000 under her bed and deposits in a bank, what is the total maximum change in loans? 8. If the central bank buys $1,000 worth of bonds from a bank, what is the immediate change in the money supply? 9. If the central bank buys $1,000 worth of bonds from a bank, what is the immediate change in checkable bank deposits (demand deposits)? 10. If the central bank buys $1,000 worth of bonds from a bank, what is the immediate change in required bank reserves? 11. If the central bank buys $1,000 worth of bonds from a bank, what is the immediate change in the bank's excess reserves? 12. If the central bank buys $1,000 worth of bonds from a bank, what is the total maximum change in the money supply? 13. If the central bank buys $1,000 worth of bonds from a bank, what is the total maximum change in checkable bank deposits (demand deposits)? 14. If the central bank buys $1,000 worth of bonds from a bank, what is the total maximum change in required reserves in the banking system?

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1 If Kaci finds 1000 under her bed and deposits in a bank what is the immediate change in the money supply Answer The immediate change in the money supply would be 1000 This is because the 1000 deposi... View full answer

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