If the required reserve ratio is 10 percent,currency in circulation is $400 billion,checkable deposits are $1,000 billion,and excess reserves total $1 billion,then the monetary base is

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The monetary base is calculated by adding the currency in circulation ($400 billion) to the total reserves (required reserves + excess reserves). With a 10% reserve requirement on $1,000 billion in checkable deposits, required reserves are $100 billion. Adding the $1 billion in excess reserves gives total reserves of $101 billion. Thus, the monetary base is $400 billion (currency in circulation) + $101 billion (total reserves) = $501 billion.

If the Required Reserve Ratio Is 10 Percent,currency in Circulation