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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