Question

g The "monetary base" is simply: a. the total of all currency in circulation, outside banks b. the total vault cash held among all depository institutions c. the amount of borrowing from the Federal Reserve, by all depository institutions d. the face value of all U.S. government securities outstanding e. the total of currency in circulation, plus depository institution reserves and vault cash

Answer 1

Answer:

e. the total of currency in circulation, plus depository institution reserves and vault cash

Explanation:

Monetary base is a concept in money supply that measures highly liquid assets in an economy.

It includes all cash that is in circulation in the economy and those deposits that are held as reserves by the central bank from commercial banks. Cash in bank vaults are also included because they are readily available to the economy.

For example if there is $200 million in circulation and there is $13 billion in the central bank as reserves from commercial banks, the total monetary base is $13.2 billion