From 1929 to 1933, the Federal Reserve increased the monetary base by 20 percent, yet the money supply (M1) fell by 25 percent, and M2 fell even more.

1) How is the monetary base different from the money supply?

2) How can the Fed affect the money base??

Answer rating: 100% (QA)

1 Monetary base is the amount of currency in circulation and all the reserves held at bank Money sup... View the full answer