7 questions on "determining the money supply - the money multiplier in reality"

How do we determine the money supply?
Using the ration of reserves and the fraction of the money supply that individuals hold in the form of currency
What doesnt the centeral bank control?
It does not control the allocation of that sum between the bank reserves, and the currency in circulation.
What changes when money is deposited into the bank? what do we call it?
The currency in circulation decreases, but increases the bank reserves
it is called leaving monetary base
What do we call the sum of the currency in circulation and  reserves held by banks? Who controls it?
the monetary base
monetary authorities control
In what to ways is the monetary base different from the money supply?
  • Bank reserves which are part of the monetary base aren't considered part of the money supply
    • because money held as bank reserves in a bank vault or deposited at the bank of Canada isn't considered part of the money supply
  • chequable deposits are part of the money supply, because they are available for spending, but aren't part of the monetary base.
  • most of the monetary base and money supply actually consist of currency in circulation.
What is the ratio of  the money supply to the monetary base? How should it be interpreted?
  • The money multiplier
  • it should be interpreted as the maximum (potential) change in money supply when there is a unit change in monetary base.
Money in currency in circulation does not support multiple money in money supply
Difference between money supply and currency in circulation
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