In Macroland There Is $1,000,000 in Currency That Can Either

question 47

Multiple Choice

In Macroland there is $1,000,000 in currency that can either be held by the public as currency or deposited into banks.Banks'desired reserve/deposit ratio is 10%.If the public of Macroland decides to hold more currency, increasing the proportion they hold from 50% to 75%, the money supply in Macroland will ______.

• A)increase.
• B)decrease.
• C)remain the same.
• D)either increase or decrease.

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Definitions:

Personal Income Tax

A tax levied on individuals or households by the government based on their income, with rates typically increasing as income increases.

Federal Personal Income Tax Brackets

Federal Personal Income Tax Brackets are ranges of income taxed at specific rates within the federal tax system, designed to ensure tax is progressively imposed based on earners' ability to pay.

Corporate Income Tax

A tax on the profits made by corporations, affecting their net income and potentially their investment behaviors.

Social Security Tax

A tax levied on both employers and employees to fund the Social Security program, which provides retirement, disability, and survivors' benefits.