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

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Definitions:

Facility-Level Costs

These are the costs that are necessary to operate a facility, such as a manufacturing plant or a warehouse, and do not vary significantly with production volume.

Overhead Cost

Expenses related to the ongoing operational costs of running a business that are not directly tied to the production of goods or services.

Traditional Costing System

A costing methodology that allocates overhead costs to products based on a predetermined rate, often using direct labor hours or machine hours as the allocation base.

Activity-Based Costing System

A costing methodology that assigns costs to products or services based on the activities that go into producing them, providing detailed insights into the actual consumption of resources.