Try another version of these questions

Question 1

Suppose the Fed decreases required reserve ratio.

As a result of this policy, what will happen to the money supply?

 

Hint


Question 2

Suppose the Fed increases discount rate.

As a result of this policy, what will happen to the money supply?

 

Hint


Question 3

Consider the following balance sheet for TD Bank.

AssetsLiabilities
Reserves483Deposits2100
Loans1617

Suppose that someone deposited $200 at TD Bank.

Given this data, what is the maximum amount by which the money supply will increase?

Hint