The monetary base is equal to
A)banks' assets plus liabilities.
B)Federal Reserve notes plus coins plus banks' reserves at the Fed.
C)checkable deposits plus coins plus and traveler's checks.
D)checkable deposits plus coins plus banks' assets.
E)M2 minus M1.

Question

Quizplus · Accepted Answer

The monetary base, also known as the high-powered money or the central bank money, refers to the sum of Federal Reserve notes (paper money) and coins in circulation and banks' reserves held at the Federal Reserve. It is the narrowest definition of the money supply and represents the foundation upon which the rest of the money supply is built. The other choices are either incorrect or refer to broader measures of the money supply that include items such as checkable deposits or traveler's checks.

The Monetary Base Is Equal to