The Monetary Base Consists of the Sum of

question 30

Multiple Choice

The monetary base consists of the sum of

• A)Bank of Canada notes held within the Bank of Canada, bank deposits at the Bank of Canada, and coins held by banks.
• B)Bank of Canada notes held outside the Bank of Canada, the desired reserves of chartered banks, and coins held by banks.
• C)Bank of Canada notes held outside the Bank of Canada, bank deposits at the Bank of Canada, and coins held by banks and the public.
• D)Bank of Canada notes held within the Bank of Canada, bank deposits at the Bank of Canada, and coins held by banks and the public.
• E)Bank of Canada notes held outside the Bank of Canada, bank deposits at the Bank of Canada, and notes and coins held by banks.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are substitutes but not perfect substitutes, leading to differentiated competition.

Excess Capacity

A situation where a firm is producing less than the maximum output due to insufficient demand.

Strategic Behavior

Self-interested economic actions that take into account the expected reactions of others.

International Cartel

An agreement among businesses or countries from different countries to control prices, limit competition, or divide markets.