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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Definitions:

Current Year

The ongoing year according to the Gregorian calendar, continuously updating as time progresses.

Paasche Price Index

A price index that measures the price changes between the current and base period by using the current period quantities as weights.

Doggerel

Doggerel denotes poorly written verse, often characterized by its triviality or nonsensical content.

Paasche Price Index

A price index that measures the change in the purchasing power of a basket of goods and services, using the current period consumption pattern as the weight.