what s the difference between monetary base and money supply 
a country s monetary base includes any currency in circulation as well as money held in reserves at banks and with the central bank the money supply of a country on the other hand refers to the total amount of money in circulation this includes banknotes coins and money held by consumers at bank accounts the bottom linecentral banks have a variety of functions for their economies one of the primary functions is to provide money and bank reserves the money that they provide and inject into their economies is called the monetary base the monetary base is important in any economy because it is used to complete and settle transactions and pay off debt 