【正确答案】The monetary base, or high-powered money, is defined as banking system reserves plus currency held by the public. More specifically, the monetary base consists of reserve deposits held in the central bank, vault cash or currency held by commercial banks, and currency held by the public. Thus the monetary base can be used either as cash holdings for the public or as reserves to support bank deposits. The monetary base is often expressed in formula as: 　　B = C + R 　　B stands for monetary base, R for banking system reserves, and C for currency held by the public. The monetary base is the central bank’s liabilities. In Western countries, the monetary base accounts for an absolutely large percentage in the central bank’s liabilities. 　　And, because R = Fb + Cb 　　B = Fb+Cb+C 　　 The monetary base consists of the net monetary liabilities of a consolidated balance sheet of the monetary authorities—taking U. S. for instance. The Treasury’s net monetary liabilities are the outstanding currency and coin it has issued, exclusive of that held in the Treasury and the Fed. Today, this consists chiefly of coins. The Federal Reserve’s net monetary liabilities consist of all Federal Reserve notes outstanding (paper money) that are not held in the Fed or Treasury, plus the reserve deposits of banks at the Federal Reserve. As we have indicated and will explain shortly, the Federal Reserve can accurately control the magnitude of these net monetary liabilities by controlling its own balance sheet.