The monetary base is which of the following?

Question

Quizplus · Accepted Answer

The monetary base, also known as high-powered money or the central bank's money, is the sum of the reserves held by depository institutions and the currency in circulation in the hands of the public. Therefore, option B, "the sum of reserves and currency in the hands of the public" is the correct choice. Option A is just the reserves of depository institutions, and option C is just the currency held in vaults by depository institutions. Option D is just the currency in the hands of the public and does not include reserves.

The Monetary Base Is Which of the Following