Exam 16: The Monetary System: The Feds Tools of Monetary Control

Scenario 29-2. The Monetary Policy of Tazi is controlled by the country's central bank known as the Bank of Tazi.The local unit of currency is the taz.Aggregate banking statistics show that collectively the banks of Tazi hold 300 million tazes of required reserves,75 million tazes of excess reserves,have issued 7,500 million tazes of deposits,and hold 225 million tazes of Tazian Treasury bonds.Tazians prefer to use only demand deposits and so all money is on deposit at the bank. -Refer to Scenario 29-2.Assume that banks desire to continue holding the same ratio of excess reserves to deposits.What is the reserve requirement and the reserve ratio for Tazian Banks?

In a fractional-reserve banking system,an increase in reserve requirements

If the Fed increases the reserve ratio from 5 percent to 12.5 percent,then the money multiplier

In a fractional-reserve banking system with no excess reserves and no currency holdings,if the central bank buys $100 million worth of bonds,

Which of the following is not a tool of monetary policy?

If the Fed raised the reserve requirement,the demand for reserves would