Scenario 29-1. The Monetary Policy of Salidiva Is Determined by the Salidivian

question 9

Multiple Choice

Scenario 29-1.
The monetary policy of Salidiva is determined by the Salidivian Central Bank.The local currency is the salido.Salidivian banks collectively hold 100 million salidos of required reserves,25 million salidos of excess reserves,250 million salidos of Salidivian Treasury Bonds,and their customers hold 1,000 million salidos of deposits.Salidivians prefer to use only demand deposits and so the money supply consists of demand deposits.
-Refer to Scenario 29-1.Assuming the only other item Salidivian banks have on their balance sheets is loans,what is the value of existing loans made by Salidivian banks?

• A) 625 million salidos
• B) 875 million salidos
• C) 1,125 million salidos
• D) None of the above is correct.

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