Answer the indicated question on the basis of the information in Table 14.1.Each question is based on the original balance sheet.

-Considering only the information in Table 14.1,the basic money supply is:
A) $120 billion.
B) $800 billion.
C) $920 billion.
D) $1 trillion.

Question

Answer the indicated question on the basis of the information in Table 14.1.Each question is based on the original balance sheet.
 
-Considering only the information in Table 14.1,the basic money supply is:
A) $120 billion. 
B) $800 billion. 
C) $920 billion. 
D) $1 trillion.

Quizplus · Accepted Answer

The basic money supply is the sum of currency in circulation and total reserves held by banks. In Table 14.1, the currency in circulation is $920 billion and the total reserves held by banks is $0 billion, therefore the basic money supply is $920 billion.

Answer the Indicated Question on the Basis of the Information