The monetary base is
A) the sum of currency and bond holdings kept by the Fed.
B) the sum of required reserves and outstanding deposits held by member banks of the Federal Reserve System.
C) the sum of bond holdings and currency holdings of private banks across the United States.
D) the sum of currency and required reserves held throughout the United States.
E) none of the above.

Question

Quizplus · Accepted Answer

The monetary base includes all physical money, such as coins and currency, plus the reserves that commercial banks hold in their accounts with the Federal Reserve (required reserves) but not the bonds. It does not include bond holdings.

The Monetary Base Is