In Econland, All $5 000 000 in Currency Is Held

question 7

Multiple Choice

In Econland, all $5 000 000 in currency is held by banks as reserves.The public does not hold any currency.If the banks' desired reserve-deposit ratio is 10 per cent, the money supply in Econland equals:

• A)$4 545 545
• B)$5 000 000
• C)$5 500 000
• D)50 000 000

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