Money Supply

Monetary base includes...

• bank reserves

• currency in circulation

• money supply

• M1 & M2

• everything

Why banks need to put money in the Federal Reserves vault?

• So the Fed won't go bankrupt

• So the Fed could make a profit

• So the Fed could provide them with cash if they need it

• So the Fed could penalize them if they violate the law.

What's not included in the Money supply?

• the money I have in my wallet

• the money hidden in your parents closet

• The checking account money

• Money you've invested in stocks

What's in the Monetary Base?

• Only the Bank reserves

• Only the money in circulation

• Both Bank Reserves and Money in Circulation

• Bank Reseves, Money in Circulation, and Checkable deposits.

What is a "Bank Reserves"

• The Total Reserves in the bank

• Only the Excess reserves from the Bank

• The Federal reserves

• All of the Reserves.

What is a bank Bond?

• Money that the Fed owes to the bank

• Money that the bank owes to the Fed

• Money that both the Fed and the bank owes to the general public

• Money created that is already part of the money supply