Money Creation and Monetary Policy Tools

Assume the following: Initial deposit into a new bank of $15,000, the reserve requirement of 12%. Calculate the following:

a. List expansionary and contractionary monetary policy tools

b. Calculate the level of total Reserves, Required Reserves, and Excess Reserves - show all work or no credit will be given - which of the above represents the lending capability of the bank

c. Calculate the money multiplier when the reserve requirement is 12%? Show all work or no credit will be given.

d. Calculate the impact on the money supply of the bank fully loaning up - show all work

e, Calculate the impact on the money supply if the bank does not fully loan up but lends 80% of available funds - show all work

Answer rating: 100% (QA)

Incorporating the strengths of Response A and Response B while addressing their shortcomings and adhering to the task instructions Prompt Assume the following Initial deposit into a new bank of 15000 ... View the full answer