In Macroland, Currency Held by the Public Is 2,000 Econs

question 148

Multiple Choice

In Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and the required reserve/deposit ratio is 15 percent. If the Central Bank lowers the required reserve/deposit ratio making the new desired ratio equal to 10 percent, then the money supply in Macroland will ________ to ________ econs, assuming that the public does not wish to change the amount of currency it holds.

• A)increase; 4,000
• B)increase; 5,000
• C)decrease; 4,000
• D)decrease; 5,000

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Definitions:

Poverty

A state where individuals or communities lack the financial resources to meet basic living needs, such as food, shelter, and healthcare.

Elderly

Individuals, typically of an advanced age, often defined as those who are 65 years or older, representing a specific demographic group within society.

Gini Coefficient

A measure of income inequality within a population, ranging from 0 (perfect equality) to 1 (perfect inequality).

Lorenz Curve

A graphical representation used to show the distribution of income or wealth within a society, depicting the proportion of total income earned by various segments of the population.