Please answer two questions. Your answer to each question must be at most 150 words. Q#1. Your childhood friend told you the following: “I recently read that more than half of the money issued by the government is actually held by people in foreign countries. If that’s true, then the United States is less than half as wealthy as government statistics indicate.” Do you agree or disagree with your friend? Briefly explain. Q#2. Suppose you are a manager at Bank of America and the Federal Reserve raises the required reserve ratio from 10 percent to 12 percent. What actions would you have to take? How would your actions and those of other bank managers end up affecting the money supply?
Please answer two questions. Your answer to each question must be at most 150
words.
Q#1. Your childhood friend told you the following: “I recently read that more than half of the money issued by the government is actually held by people in foreign countries. If that’s true, then the United States is less than half as wealthy as government statistics indicate.” Do you agree or disagree with your friend? Briefly explain.
Q#2. Suppose you are a manager at Bank of America and the Federal Reserve raises the required reserve ratio from 10 percent to 12 percent. What actions would you have to take? How would your actions and those of other bank managers end up affecting the money supply?
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