EXERCISES

CHAPTER 10 – MONEY AND MONETARY POLICIES

EXERCISE 1

1. J
2. P / R
3. S
4. Q
5. O
6. M
7. R
8. E
9. L
10. F
11. H
12. I
13. K
14. C
15. B
16. G
17. F
18. N
19. D
20. A

II.

III.
1. B
2. B
3. A
4. A
5. B
6. B
EXERCISE 2
1. Decrease
2. Decrease
3. Increase
4. Inecrease
5. Increase
6. Increase
7. Decrease
8. Increase
9. Decrease
10. Decrease

EXERCISE 3

1. Decrease
2. Decrease
3. Decrease
4. Decrease
5. Increase
6. Increase
7. Increase
8. Increase
9. Increase
10. Decrease
11. Increase
12. Decrease
13. Increase
14. Increase
15. Increase

EXERCISE 4

EXERCISE 5

1. The answer here may vary.

2. The Fractional Reserve System
3.
a. Maximum amount of checks that can be circulated from a demand deposit of P300M with a
reserve requirement of 15% = 216.75M
b. Deposited in Bank 1 P300 M
Deposited in Bank 2 255 M
Total money created 555 M

c. 168.75 M