I know the answer is A but I need it explained how to do the problem Meditorian

Question

I know the answer is A but I need it explained how to do the problem

Meditorian Banking Statistics The monetary policy of Meditor is determined by the Meditorian Central Bank. The local currency is the medit. Meditorian banks collectively hold 100 million medits of required reserves, 25 million medits of excess reserves, 250 million medits of Meditorian Treasury Bonds, and their customers hold 1,000 million medits of deposits. Meditorians prefer to use only demand deposits and so all currency is on deposit at the bank. 39. Refer to Meditorian Banking Statistics. Suppose that the Central Bank of Meditor purchases 25 million medits of Meditorian Treasury Bonds from banks. Suppose also that both the required reserve ratio and the percentage of deposits held as excess reserves stay the same. By how much would the money supply of Meditor change? a) 200 million medits b) 150 million medits c) 100 million medits d) None of the above is correct.

Explanation / Answer

250 - 2*25 = $200 millons

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