Scenario 29-2. The Monetary Policy of Tazi Is Controlled by the Country's

question 174

Multiple Choice

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.Suppose the Bank of Tazi purchased 50 million Tazes of Tazian Treasury Bonds from the banks.Suppose also that both the reserve requirement and the percentage of deposits held as excess reserves stay the same.By how much does the money supply change?

• A) 625 million Tazes
• B) 1,000 million Tazes
• C) 1,250 million Tazes
• D) None of the above is correct.

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Definitions:

FOB Destination

A shipping term indicating that the seller retains ownership and is responsible for the goods until they are delivered and the buyer's site.

Freight Costs

Expenses associated with transporting goods from one place to another, which can be paid by the shipper or the receiver.

Net 45

A payment term indicating that the full payment is due 45 days from the invoice date.

Credit Terms

The conditions under which a seller extends credit to a buyer, detailing the repayment time frame, interest rate, and penalties for late payment.