In Macroland, currency held by the public is 1,000 econs, bank reserves are 100 econs, and the desired reserve/deposit ratio is 25 percent. 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, assuming that the public does not wish to change econs to the amount of currency it holds. Multiple Choice O 1,400; 1,200 O 1,400; 2,600 2,500; 3,700

In Macroland, currency held by the public is 1,000 econs, bank reserves are 100 econs, and the desired reserve/deposit ratio is 25 percent. 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, assuming that the public does not wish to change econs to the amount of currency it holds. Multiple Choice O 1,400; 1,200 O 1,400; 2,600 2,500; 3,700

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter13: Money And The Banking System

Section: Chapter Questions

Problem 18CQ

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Bank A:Reserves on hand $38,000Deposit in the Fed $30,000US government bonds $12,000Checking account balances $120,000Savings account balances $25,000Bank B:Reserves on hand $50,000US government bonds $7500Savings account balances $20,000Checking account balances $100,000 In addition, people in this economy hold $8800 in cash, and all banks have the same reserve requirements we've used all semester. Calculate this economy's monetary base, carefully following all numeric instructions.
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