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:

Electrical Signal

Electrochemical transmission used by neurons to communicate information throughout the nervous system and brain.

Decibels

A unit of measurement for sound intensity, representing the relative loudness of sounds.

Loudness

A measure of how intense or powerful a sound seems to a listener, often associated with volume.

Tinnitus

A condition characterized by hearing noises such as ringing, buzzing, or humming in the ears when no external sound is present.