Management Monetary base



u.s. monetary base


open market operations monetary policy tools directly expand or contract monetary base.


the monetary base , monetary policy typically controlled same national institution, either finance ministry or central bank. these institutions change monetary base through open market transactions: buying , selling of government bonds. typically, can influence banking activities manipulating interest rates , setting reserve requirements (how money banks must keep on hand instead of loaning out borrowers).


the monetary base (mb) called high-powered because increase typically result in larger increase in supply of demand deposits through banks loan-making; ratio called money multiplier.








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