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

question 70

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 10 percent. If the Central Bank raises the required reserve/deposit ratio making the new desired ratio equal to 15 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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RMBCA

The Revised Model Business Corporation Act (RMBCA) is a set of model laws prepared by the American Bar Association to provide a standard for the governance of corporations.

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