Question

Define high powered money

Answer 1

Monetary base

In economics, the monetary base in a country is the total amount of bank notes and coins. This includes: the total currency circulating in the public, plus the currency that is physically held in the vaults of commercial banks, plus the commercial banks' reserves held in the central bank.

Answer 2

Answer:

High powered money is also known as secured money (RM) because banks keep with them Reserve Fund(R) and on the bases of this Demand deposits (DD) are created. Since the bases of creation of credit is Reserve Fund (R) and R is obtained as a part of high powered money (H) Security fund so high powered money is termed as Base money.