In Macroland there is $12,000,000 in currency. The public holds half of the currency and banks hold the rest as reserves. If banks' desired reserve/deposit ratio is 12.5%, deposits in Macroland equal and the money supply equals .

A. $96,000,000; $96,000,000
B. $48,000,000; $54,000,000
C. $54,000,000; $54,000,000
D. $48,000,000; $75,000,000

Answer: B

Economics

The difference between the buy at and the sell at price is caused by:

a. market friction. b. transaction cost. c. menu cost. d. market friction and transaction cost.

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Economics

The United States has approximately

A. 100,000 businesses. B. 5.1 million businesses. C. 14 million businesses. D. 30 million businesses.

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Economics

In Macroland there is $12,000,000 in currency. The public holds half of the currency and banks hold the rest as reserves. If banks' desired reserve/deposit ratio is 12.5%, deposits in Macroland equal ________ and the money supply equals ________.