When Currency Is Equal to $100 Billion and Reserves Are

question 10

Multiple Choice

When currency is equal to $100 billion and reserves are equal to $200 billion, and we know that the money multiplier is equal to 2.5, then the money supply will be equal to ________.

• A) $750 billion
• B) $250 billion
• C) $300 billion
• D) $450 billion

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Definitions:

MAGI

Modified Adjusted Gross Income is a measure used by the IRS to determine eligibility for certain tax benefits, adjusting the gross income by adding back certain deductions.

Short-term Gain

Profit realized from the sale of assets held for a year or less, subject to taxes at ordinary income rates in many jurisdictions.

Long-term Gain

The profit from the sale of an asset held for more than a year, subject to lower capital gains tax rates.

Investment Portfolio

A collection of assets including stocks, bonds, mutual funds, and other investments held by an individual or an institution.