In Macroland,currency Held by the Public Is 2000 Econs,bank Reserves

question 119

Multiple Choice

In Macroland,currency held by the public is 2000 econs,bank reserves are 300 econs,and the desired reserve-deposit ratio is 15%.If the central bank prints an additional 300 econs and uses this new currency to buy government bonds from the public,the money supply in Macroland will increase from _________ econs to ________ econs,assuming that the public does not wish to change the amount of currency it holds.

• A) 2,000;2,300
• B) 2,300;2,600
• C) 2,645;2,990
• D) 4,000;4,300
• E) 4,000;6,000

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