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

question 2

Multiple Choice

In Macroland,currency held by the public is 2000 econs,bank reserves are 300 econs,and the desired reserve-deposit ratio is 10%.If the central bank sells government bonds to the public in exchange for 200 econs that are then destroyed,the money supply in Macroland will decrease from _________ econs to _________ econs,assuming that the public does not wish to change the amount of currency it holds.

• A) 2,000;1,800
• B) 2,300;2,100
• C) 3,000;1,000
• D) 5,000;3,000
• E) 6,000;2,000

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