Answered: The Monetary Policy of Tazi is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

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 Tazian dollar. Aggregate banking statistics show that collectively the banks of Tazi hold $280 million of required reserves, $70 million of excess reserves, have issued $7,000 million of deposits, and hold $560 million of Tazian Treasury bonds. Tazians prefer to use only demand deposits and so all money is on deposit at the bank.

Refer to Scenario 129-12. Assuming the only other thing Tazian banks have on their balance sheets is loans, what is the value of existing loans made by Tazian banks?

Question 26 options:

	$6,090 million
	$6,650 million
	$6,730 million
	$5,890 million

Definition Definition Capital reserves held by banks or financial institutions over and above the reserves that are required to be maintained by the regulator toward its liabilities and for internal controls. For commercial banks, excess reserve is the amount over the standard reserve as decided by the central bank. These excess reserve funds are available in the form of cash and cash equivalents.

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