In Econland,all $15,000,000 in Currency Is Held by Banks as Reserves.The

question 32

Multiple Choice

In Econland,all $15,000,000 in currency is held by banks as reserves.The public does not hold any currency.If the banks' desired reserve-deposit ratio is 5%,the money supply in Econland equals

• A) $14,285,714.
• B) $15,000,000.
• C) $15,750,000.
• D) $300,000,000.
• E) $315,000,000.

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Definitions:

Federal Government

The national government of a federal country, which has specific powers delegated to it by a constitution, distinguished from state or provincial governments.

Custodian of Freedom

A term that implies the responsibility of protecting and preserving the liberties and rights of a group or nation.

Burlingame Treaty

An 1868 agreement between the United States and China that recognized mutual rights of their citizens and encouraged cultural and commercial exchange.

Sovereignty of China

The authority and autonomy of China as a state to govern itself, free from external control or influence, which has been a significant issue in its historical relations with foreign powers.