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

question 65

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 prints an additional 200 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;2,200
• B) 2,300;2,500
• C) 3,000;5,000
• D) 5,000;7,000
• E) 5,300;7,500

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Definitions:

FIFO Cost Method

An inventory valuation method that assumes goods are sold in the order they were acquired, using the costs of the earliest items first.

Ending Inventory

This is the total value of all inventory still available for sale at the end of an accounting period.

Periodic Inventory System

An inventory accounting method where inventory levels and cost of goods sold are determined at the end of an accounting period.

Beginning Inventory

The value of all inventory that a company has in stock at the start of an accounting period.