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
M2
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Solution Summary
Monetary Base is defined.
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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 ...
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