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    Calculating reserves, monetary base, and M2

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    Given a central bank has gold, foreign exchange, banks' deposits, gov't securities and currency in circulation and the banks had checkable deposits, savings deposits/time deposits, and currency inside the banks which of the above who I use to calculate

    a Banks' reserves
    The Monetary Base

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    Solution Preview

    Banks' reserves = bank deposits at the Fed + currency held in bank = currency inside the banks (in this case)

    Monetary Base is the total of currency held by the non-bank public, vault cash held by banks, and Federal Reserve deposits of the banks. This contains the ...

    Solution Summary

    Monetary Base is defined.