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

question 78

Multiple Choice

In Macroland, currency held by the public is 2,000 econs, bank reserves are 300 econs, and the desired (and current) reserve/deposit ratio is 15 percent. If commercial banks borrow 100 econs in reserves from the Central Bank through discount window lending, 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; 3,133
• B) increase; 4,100
• C) increase; 4,667
• D) increase; 2,667

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Definitions:

Intolerant

Showing an unwillingness or inability to accept different opinions, beliefs, or behaviors.

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Individuals with an extreme and fanatical belief in racial superiority, often leading to discriminatory and hateful behavior towards other races.

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Geographical areas with high concentrations of a particular ethnic group, distinct from the larger surrounding area.

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People who leave their country of origin to settle permanently in another country, often seeking better living conditions, employment opportunities, or safety.