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Mathematics & Economics
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Topic:

Monetary Policy and Fiscal Policy (Coursework Sample)

Instructions:

In this Assignment, you will compute the required reserves and excess reserves using bank deposit data. You will also analyze the impacts of fiscal policy and monetary policy on the economy.

Instructions: Answer all of the following questions. You are required to follow proper APA format. Read the Criteria section below for more information before you begin this Assignment.

In this Assignment, you will be assessed on the following outcome:

MT445-5: Examine how fiscal and monetary policies affect the U.S. economy.

 

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Content:

Unit 9 Assignment: Monetary Policy and Fiscal Policy
Student Name:
In this Assignment, you will compute the required reserves and excess reserves using bank deposit data. You will also analyze the impacts of fiscal policy and monetary policy on the economy.
Instructions: Answer all of the following questions. You are required to follow proper APA format. Read the Criteria section below for more information before you begin this Assignment.
In this Assignment, you will be assessed on the following outcome:
MT445-5: Examine how fiscal and monetary policies affect the U.S. economy.
1. Determine whether each of the following is counted in the M1 measure of the money supply:
* The coins in your piggy bank.
Yes. This is liquid money (cash) in a deposit save.
* The funds in your checking account at First National Bank.
Yes. This is part of the checkable (demand) deposit in a bank account CITATION Ggr18 \l 1033 (Mankiw, 2018).
* The funds in your savings account at Second National Bank.
No. savings form part of the M2 money supply component. The cash is not in liquid form.
* The traveler’s check you have left over from your trip to Germany.
Yes. Traveler’s check constitutes M1 CITATION Ggr18 \l 1033 (Mankiw, 2018).
* The available balance on your Citico Gold MasterCard.
No. This is a credit card and credit card are not considered as money by financial institutions but rather short-term loan which does not fir in either MI or M2.
2. Refer to the simplified balance sheet for a bank and answer the following questions.
Assets


Liabilities


Reserves

$10,000

Deposits

$70,000

Loans

$66,000

Stockholder's equity

$6,000

* If the required reserve ratio is 5%, how much in excess reserves does this bank hold?
5%*$70,000 = $3,500
= $10,000-$3,500 = $6,500 excess reserves
* What is the maximum amount this bank can expand on

...
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