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welcome to this rapid review of our model of the money supply so lets jump right into it before we can build the model we want to remind you of two definitions so first is base money or the so called monetary base and this is all the you know money effectively that the central bank created and it can end up in one of two places it can be held as currency by the public or held as banks held by banks as reserves so C denotes currency and R denotes reserves then another definition we have is of the actual money supply M and theres different definitions right the theres m1 m2 the Fed used to keep track of m3 and theyre basically just different levels of generality of the lake what we would include as part of the money supply for a simple model were just gonna include currency C like above and deed or checking account deposits and now based on this these two equations we can see that and then B are sort of somehow related in particular you know one depends on R one depends on D but DNR