Meditorian Banking Statistics The Monetary Policy of Meditor Is Determined by the Meditorian

question 126

Multiple Choice

Meditorian Banking Statistics
The monetary policy of Meditor is determined by the Meditorian Central Bank. The local currency is the medit. Meditorian banks collectively hold 100 million medits of required reserves, 25 million medits of excess reserves, 250 million medits of Meditorian Treasury Bonds, and their customers hold 1,000 million medits of deposits. Meditorians prefer to use only demand deposits and so all currency is on deposit at the bank.
-Refer to Meditorian Central Banking.Assume that banks desire to continue holding the same ratio of excess reserves to deposits.What is the required reserve ratio and what is the reserve ratio?

• A)2%, 8%
• B)8%, 10%
• C)10%, 12.5%
• D)None of the above is correct.

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Definitions:

Formalization

Is written documentation of work rules, policies, and procedures.

Total Quality Management

A holistic approach to long-term success that views continuous improvement in all aspects of an organization as a process and not as a short-term goal.

Centralization

The degree to which the authority to make decisions is restricted to higher levels of management.

Higher Levels

Refers to the more advanced or senior ranks and responsibilities in an organizational hierarchy or in the context of thinking, it refers to more complex and abstract thought processes.