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

question 192

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.Suppose that the Central Bank of Meditor loaned the banks of Meditor 5 million medits.Suppose also that both the required reserve ratio and the percentage of deposits held as excess reserves stay the same.By how much would the money supply of Meditor change?

• A)60 million medits
• B)50 million medits
• C)40 million medits
• D)None of the above is correct.

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Definitions:

Net Income

The earnings a company retains following the deduction of all costs and taxes from its revenue.

Rent Expense

The cost incurred by a business to use property or equipment for business purposes.

Income Statement

A financial document that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and net income.

Balance Sheet

A record that presents a summary of a business's assets, liabilities, and shareholders' equity at a given time.