The table illustrates how the government funds its budget deficit in a closed economy. If notes and coins in circulation remain unchanged and commercial banks keep a 10% cash reserve ratio, what increase will there be in the money supply? (table: budget deficit $200bn; sale of government securities to the central bank $50bn; sale to non-bank private sector $150bn)
- A$50 billion
- B$150 billion
- C$200 billion
- D$500 billion