The monetary base is the sum of
A) U.S. Treasury notes and other government securities.
B) currency and reserves of depository institutions.
C) foreign and domestic deposits at the Fed.
D) currency and checkable deposits at depository institutions.

Question

Quizplus · Accepted Answer

The monetary base consists of currency (paper money and coins) in circulation outside the Federal Reserve Banks and the U.S. Treasury, plus reserves held by depository institutions at Federal Reserve Banks. These reserves are either in the form of vault cash or balances in accounts with the Federal Reserve. It does not include U.S. Treasury notes, foreign or domestic deposits at the Fed, or checkable deposits at depository institutions.

The Monetary Base Is the Sum of