In Macroland there is $12,000,000 in currency.The public holds half of the currency and banks hold the rest as reserves.If banks'desired reserve/deposit ratio is 12.5%, deposits in Macroland equal ______ and the money supply equals _______.

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Banks hold $6,000,000 as reserves. With a reserve ratio of 12.5%, deposits are $48,000,000 (since $6,000,000 is 12.5% of $48,000,000). The money supply is the sum of deposits and currency held by the public, which is $48,000,000 + $6,000,000 = $54,000,000.

In Macroland There Is $12,000,000 in Currency