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

question 121

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.Assume that banks desire to continue holding the same ratio of excess reserves to deposits.What is the reserve requirement and the reserve ratio for Tazian Banks?

• A)5 percent,8 percent
• B)4 percent,8 percent
• C)4 percent,5 percent
• D)None of the above is correct.

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Definitions:

Electrically Charged

Having a property that causes it to attract or repel other electrically charged objects due to the presence of electric charges on its surface.

At Rest

A state in which one is not engaged in physical activity or exertion, often associated with the body’s normal functions at a basal metabolic rate.

Neuron

A specialized cell transmitting nerve impulses; a fundamental unit of the brain and nervous system.

Axon

An elongated, thin extension of a neuron, or nerve cell, that generally transports electrical signals from the cell body of the neuron.