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

---

Definitions:

Self-Interest

The consideration of one's own advantage or benefit, driving personal actions and decisions in various contexts.

High Mach

Describes individuals with a Machiavellian personality trait, characterized by manipulativeness, pragmatism, and a focus on self-interest and personal gain.

Formal, Structured Manner

A methodical approach to tasks and responsibilities that follows established protocols and procedures.

Scarce Resources

Limited materials, finances, or other assets that are insufficient to meet the demands placed upon them.