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The monetary base equals a. currency in circulation. b. bank reserves. c. currency in
Chapter 0, Problem 5(choose chapter or problem)
The monetary base equals a. currency in circulation. b. bank reserves. c. currency in circulation bank reserves. d. currency in circulation + bank reserves. e. currency in circulation/bank reserves.
Questions & Answers
QUESTION:
The monetary base equals a. currency in circulation. b. bank reserves. c. currency in circulation bank reserves. d. currency in circulation + bank reserves. e. currency in circulation/bank reserves.
ANSWER:Step 1 of 2
Option (a) is incorrect because currency in circulation is only mentioned in this option, and the bank reserves are not mentioned.
Option (b) is incorrect because bank reserves are only mentioned in this option, and the currency in circulation is not mentioned.
Option (c) is incorrect because the option is not properly written to indicate that currency in circulation and bank reserves are both different, and
option (d) is incorrect because the monetary base is not the ratio between the currency in circulation and bank reserves.