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The High-Powered Money supply equation is represented as:

AH = C + R (Currency in circulation + Bank Reserves)
BH = M1 + M2
CH = Demand Deposits + Savings Deposits
DH = GDP / Money Velocity

Explanation

High-powered money (Monetary Base H) equals total cash currency held by the public (C) plus bank reserves (R).

Submitted by: mcqstutor Team More Economics MCQs →

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