The monetary base is the sum of
A)Bank of Canada notes held within the Bank of Canada, bank deposits at the Bank of Canada, and coins held by banks.
B)Bank of Canada notes held within the Bank of Canada, bank deposits at the Bank of Canada, and coins held by banks and the public.
C)Bank of Canada notes held outside the Bank of Canada, bank deposits at the Bank of Canada, and notes and coins held by banks.
D)Bank of Canada notes held outside the Bank of Canada, bank deposits at the Bank of Canada, and coins held by banks and the public.
E)Bank of Canada notes held outside the Bank of Canada, the desired reserves of chartered banks, and coins held by banks.

Question

Quizplus · Accepted Answer

The monetary base includes Bank of Canada notes in circulation (outside the Bank of Canada), bank deposits at the Bank of Canada, and coins in circulation among banks and the public. This definition captures the most liquid forms of money that are directly controlled by the central bank.

The Monetary Base Is the Sum of