If Currency Held by the Public Equals $100 Billion, Reserves

question 87

Multiple Choice

If currency held by the public equals $100 billion, reserves held by banks equal $50 billion, and bank deposits equal $500 billion, then the money supply equals:

• A) $100 billion.
• B) $150 billion.
• C) $600 billion.
• D) $650 billion.

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Definitions:

Percentage Change

A mathematical calculation that describes the degree of change over time, often used to compare the difference between two numbers expressed as a fraction of the initial value.

GDP Deflator

A price index that measures the change in the price level of all new, domestically produced, final goods and services in an economy.

Real GDP

Gross Domestic Product adjusted for inflation, which represents the value of all goods and services produced over a specific time period within a country.

Percentage Change

A mathematical calculation that shows how much a quantity has increased or decreased in comparison to its previous value, expressed as a percentage.