Understanding and Calculating Different Levels of Money
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Posljednje ažuriranje over 1 year ago
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Key Terms!
The monetary base, also known as "high-powered money" or "base money," consists of currency in circulation and reserves held by commercial banks at the central bank. The monetary base includes physical currency (coins and paper money) in the hands of the public and commercial bank reserves (both required and excess) held at the central bank.
The money supply consists of
Reserves
Checkable Deposits
Currency in Circulation
Monetary Base (MB)
M0 Supply (Sm)
Match the following for levels of money
| Stavka koja se može prevući | arrow_right_alt | Odgovarajuća stavka |
|---|---|---|
M1 Level of Money plus savings accounts plus short-time deposits plus mutual funds | arrow_right_alt | M0 Level of Money |
Currency and Coin in Circulation | arrow_right_alt | MB |
Currency in Circulation and Bank Reserves | arrow_right_alt | M1 Level of Money |
M0 Level of Money plus Checkable Deposits | arrow_right_alt | M2 Level of Money |
Complete the table for the levels of money
M0 | M1 | M2 | |
|---|---|---|---|
Medium of Exchange | |||
Store of Value | |||
Most Narrow Form of Money | |||
Near Money | |||
Most Liquid | |||
Least Liquid |
If the bank reserves are $1000, then what is the monetary base?
What is the M0 money supply?
What is the M1 money supply?