Answer to Question #227158 in Macroeconomics for Ruth Harases

Question

In the economy of Brightland, the commercial banks have deposits of $600 billion. Their reserves are $60 billion. All reserves are in deposits with the Central Bank and the commercial banks hold no excess reserves. There is $120 billion in Central Bank notes outside the banks, and there are no coins.

Answer 1

This means that the monetary economic base that is the total amount of a currency in circulation in the hands of the general public or in the form of commercial bank deposits held in the central bank's reserves will be:

$120 billion + $60 billion = $180 billion.