In Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and the desired reserve/deposit ratio is 10 percent. If the Central Bank prints an additional 200 econs and uses this new currency to buy government bonds from the public, the money supply in Macroland will increase from ________ econs to ________ econs, assuming that the public does not wish to change the amount of currency it holds.
A) 20,000; 22,000
B) 5,000; 2,000
C) 3,000; 5,000
D) 5,000; 7,000
Correct Answer:
Verified
Q62: Deposit insurance is a system in which
Q63: The Federal Open Market Committee makes decisions
Q64: The seven Fed governors, the president of
Q65: The most important, most convenient, and most
Q66: An open-market purchase of government securities by
Q68: When the central bank sells $1,000,000 worth
Q69: During the Great Depression in the United
Q70: When the Fed sells government securities, the
Q71: In an open-market purchase the Federal Reserve
Q72: One of the serious drawbacks of the
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents