Most of the increase in the monetary base between 2008 and 2016 was due to increases in

Question

Quizplus · Accepted Answer

The monetary base is made up of currency in circulation and bank reserves. Bank reserves are the deposits held by commercial banks at the central bank. During the period between 2008 and 2016, the central bank increased bank reserves significantly through various monetary policies such as quantitative easing. This is the main reason for the increase in the monetary base during this period. The increase in currency in circulation and bank deposits also contributed to some extent, but not to the same extent as bank reserves. Therefore, C is the correct choice.

Most of the Increase in the Monetary Base Between 2008