MB

(noun)

The portion of the commercial banks' reserves that is maintained in accounts with their central bank plus the total currency circulating in the public.

Related Terms

Examples of MB in the following topics:

  • Prices as Information

    • The MB function represents the buyers' evaluations of their marginal benefits.
    • Notice the MB of the 73rd unit to the buyers is P.
    • For all unit of berries, up to and including, the 73rd unit, the MB is greater than the MC.
    • Since MB = MC produces maximum net benefit, the ideal is where the price reflects MB and MC, MB = P = MC.
    • Once the P > MB buyers cease to purchase the good.

  • Introduction to Property Rights and Markets

    • Most of Neoclassical microeconomics is a story about the way market exchange reveals, communicates and uses individual evaluations about marginal benefits (MB) and marginal costs (MC).
    • The information about MC and MB revealed by market exchanges (like all information) is never perfect.
    • The existence of market power allows a buyer or seller to influence the outcome of a market exchange and distort the information about MB and MC.
    • Attenuated or weakened property rights also may distort information about MB and/or MC and result in an allocation that is less than optimal.

  • Marginal Analysis

    • For an individual MB might be MU for a firm it may be MR
    • Marginal decision rule You should engage in any activity so long as the MB > MC, the optimal level of activity is where MB = MC, when MC>MB you should not undertake the activity.
    • The marginal benefit (MB) of each unit of berries is shown in Figure VI.2.
    • The MB function decreases as more berries are obtained.
    • Net benefits are maximized when MB = MC.

  • Optimal Quantity of a Public Good

    • The optimal quantity of the public good occurs where MB (society's marginal benefit) equals MC (provider's marginal cost), or where the two curves intersect .
    • When MB = MC, resources have been allocated efficiently.
    • An activity should be stopped at the point where MB equals MC.
    • This is the MC=MB rule, by which the provider of the public good can determine which plan, will give society maximum net benefit.
    • The optimal quantity of public good occurs where MB = MC.

  • Other Measurements of the Money Supply

    • MB: Stands for "monetary base," referring to the base from which all other forms of money are created.
    • MB is the total of all physical currency plus Federal Reserve Deposits (special deposits that only banks can have at the Fed).
    • MB = Coins + US Notes + Federal Reserve Notes + Federal Reserve Deposits.

  • Demand for Public Goods

    • The sum of the individual marginal benefit curves (MB) represent the aggregate willingness to pay or aggregate demand (∑MB).

  • "Market Failure" and Property Rights

    • The MB of others or society is MBS.
    • The optimal result in a market is that the output occur at the level where the MB = MC and the price should reflect both the MB and MC;

  • Performance

  • Profits in Long Run Pure Competition

    • The purely competitive model provides a benchmark or criteria to evaluate the performance of a market; MB = P = MC.
    • The marginal benefit (MB) to the buyer is suggested by the price they are willing and able to pay.
    • The MB to the seller is the marginal revenue (MR) they earn.

  • Economic Way of Thinking

    • MB is defined as the change in total benefit (TB) caused by a one unit change in quantity consumed (Q).
    • Buyers should purchase additional units of a good so long as the MB > P.
    • The welfare of buyers and sellers will be maximized when MB = P = MC.