Question

The total liability of the monetary authority of the country, rbi, is called the monetary base or high powered money. It consists of:

Answer 1

Answer:

Also called High Powered Money because the effect of changes in monetary base on money supply is magnified by the money multiplier.

Explanation:

The money created by the Federal Reserve is the monetary base, also known as high-powered money. Banks create money by making loans.

A one-dollar increase in the monetary base causes the money supply to increase by more than one dollar. The increase in the money supply is the money multiplier