MONEY AND MONETARY POLICY WORKSHEET   1

MONEY AND MONETARY POLICY WORKSHEET

1. For each case, determine the maximum quantity of money generated in the economy after all rounds of leading are completed. Show all your work.

1. 1. Reserve requirement is 10% and excess reserves are $11 million
       
2. 2. Reserve requirement is 5% and excess reserves are $13 million

1. 3. Reserve requirement is 2 % and excess reserves are $7 million

2. Determine whether each of the following accounts is an asset or a liability to XYZ Bank.

1. 1. 1. Cash held in vaults: $ 32 million
      2. Bonds: $ 18 million
      3.  Home loans: $ 2 million
      4.  Deposits: $ 42 million
      5. Reserves: $ 20 million
      6. Borrowings from other banks: $ 30 million

        3.  The Federal Reserve is headed by the ____________________ (Board of Governors/the President/Chair), consisting of ______ __________members appointed by ____________________ (Board of Governors/the President/Chair) and confirmed by­­­_____                                (Board of Governors/the President/the Senate).
 

4.   List three components or purposes of bank regulation.