In Macroland, Currency Held by the Public Is 2,000 Econs

Multiple Choice

In Macroland, currency held by the public is 2,000 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) 20,000; 22,000
B) 5,000; 2,000
C) 3,000; 5,000
D) 5,000; 7,000