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Monetary base- which is the sum of bank reserves and currency in circulation. The formulas of MB ismonetary base = reserves + currency (MB =R+C)

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Q: What is the monetary base equal to?
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What is a larger amount M2 or monetary base?

M2 is larger than monetary base. Monetary base includes only currency with the public and reserves of commercial banks kept with central bank. Monetary base plus time deposits is equal to M2 and hence M2 is broader money while monetary base is known as narrow money.


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