The Monetary Base Is Equal to

question 5

Multiple Choice

The monetary base is equal to

• A)Federal Reserve notes plus coins plus banks' reserves at the Fed.
• B)banks' assets plus liabilities.
• C)M2 minus M1.
• D)checkable deposits plus coins plus and traveler's checks.
• E)checkable deposits plus coins plus banks' assets.

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Definitions:

Endowment

The stock of assets or resources provided to an individual, institution, or country, typically used to generate income or contribute to wealth.

Pure Exchange Economy

An economic model where no production occurs and individuals or entities trade pre-existing goods and services among each other.

Walras's Law

A principle in general equilibrium theory stating that if all markets but one are in equilibrium, then the remaining market must also be in equilibrium.

Cobb-Douglas Utility Functions

A particular form of utility function used in economics that represents preferences over two goods, characterized by their constant elasticity of substitution.