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

question 65

Multiple Choice

Scenario 29-1.
The monetary policy of Namdian is determined by the Namdian Central Bank.The local currency is the dia.Namdian banks collectively hold 100 million dias of required reserves,25 million dias of excess reserves,250 million dias of Namdian Treasury Bonds,and their customers hold 1,000 million dias of deposits.Namdians prefer to use only demand deposits and so the money supply consists of demand deposits.
-Refer to Scenario 29-1.Suppose the Central Bank of Namdia loaned the banks of Namdia 5 million dias.Suppose also that both the reserve requirement and the percentage of deposits held as excess reserves stay the same.By how much would the money supply of Namdia change?

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

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Definitions:

Freud's Dream Theory

A theory suggesting that dreams represent unconscious desires, thoughts, and motivations, with content subjected to a process of condensation and displacement.

Manifest Content

The actual literal content and storyline of a dream, as remembered by the dreamer.

Latent Content

The hidden psychological meaning behind the manifest content of dreams or other subconscious material, according to Freudian theory.

Wish-Fulfillment

A theory, often related to dreams, suggesting that dreams represent the unconscious fulfillment of wishes or desires.