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

question 3

Multiple Choice

In Macroland,currency held by the public is 2000 econs,bank reserves are 600 econs,and the desired reserve-deposit ratio is 15%.If the central bank sells government bonds to the public in exchange for 300 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;1,700
• B) 2,600;2,300
• C) 2,990;2,645
• D) 6,000;4,000
• E) 7,000;6,000