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Author Question: What is the monetary base and how does it relate to the Fed's balance sheet? What will be an ... (Read 49 times)

sabina

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on: Jun 29, 2018
What is the monetary base and how does it relate to the Fed's balance sheet?
 
  What will be an ideal response?

Question 2

Refer to Figure 4-4. What is the value of producer surplus at the equilibrium price of 15?
 
  A) 80 B) 160 C) 240 D) 400


gstein359

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The monetary base is the sum of Federal Reserve notes, coins, and depository institutions' deposits at the Fed. Aside from coins, the rest of the monetary base consists of Federal Reserve liabilities. Federal Reserve notes and depository institutions' deposits are liabilities of the Federal Reserve.

Answer to Question 2

B


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