When currency is equal to $200 billion and reserves are equal to $350 billion, and we know that the money multiplier is equal to 1.5, then the money supply will be equal to ________.

Question

Quizplus · Accepted Answer

The money supply can be calculated using the formula: Money Supply = Money Multiplier × (Currency + Reserves). Given the money multiplier is 1.5, currency is $200 billion, and reserves are $350 billion, the calculation is: Money Supply = 1.5 × ($200 billion + $350 billion) = 1.5 × $550 billion = $825 billion.

When Currency Is Equal to $200 Billion and Reserves Are