What is monetary base in economics?

In economics, the monetary base (also base money, money base, high-powered money, reserve money, outside money, central bank money or, in the UK, narrow money) in a country is the total amount of money created by the central bank. This includes: plus the commercial banks' reserves held in the central bank.

What is the monetary base of a country?

Assume that the central bank of a country has issued currency worth $100 million and the commercial banks in the country hold reserves of $50 million at the central bank. In this case, the monetary base would be $150 million ($100 million in currency + $50 million in reserves).

What is the difference between monetary base and money supply?

Where C is the total value of the currency in circulation and R is the reserve balances. What is the difference between the monetary base and the money supply? MB is the total value of the currency in circulation and reserve balances, whereas the money supply refers to the quantity of currency in circulation and checkable or demand deposits.