Which of the following components does NOT belong to the money base? A. balances in central...
Which of the following components does NOT belong to the money base?
| A. |
balances in central bank account owned by a foreign central bank |
|
| B. |
notes held by the domestic government |
|
| C. |
notes held by foreigners |
|
| D. |
balances in central bank accounts owned by domestic banks |
Homework Answers
Option C notes held by foreigners. The three components of money base are:
(i) Currency held by the public and in circulation throughout the economy.
(ii) Cash held by commercial banks and currency out of circulation.
(iii) Federal Reserve Deposits that commercial banks keep with Federal Reserve Banks.
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