Final answer:
If the public had retained the same amount of currency in 1932 as in 1931, with the other factors remaining the same, the total money supply at the end of 1932 would have been approximately $33.8 billion. Option A is correct.
Step-by-step explanation:
Based on the information given, to calculate what the money supply would have been at the end of 1932 without the public deciding to hold more currency, we can assume the currency held by the public stays constant at December 1931 levels. Given the December 1932 reserve-deposit ratio of 0.109 and bank reserves of $3.18 billion, we can calculate the potential money supply.
The formula used is: Money Supply = Bank Reserves / Reserve-Deposit Ratio. Using the December 1931 currency value of $4.59 billion:
Money Supply = $3.18 billion / 0.109 = $29.17 billion
This $29.17 billion would then be added to the currency held by the public to find the total money supply:
Total Money Supply = $29.17 billion + $4.59 billion = $33.76 billion
Since $33.76 billion is closest to the provided option A, this suggests that the money supply would have been $33.8 billion.