What does currency in the hands of the public include in the monetary base?

The monetary base, often referred to as the "high-powered money," consists of the total amount of a country's currency that is either in circulation or held by the central bank. When considering currency in the hands of the public, this specifically refers to the actual physical currency that individuals and businesses use in daily transactions.

The correct choice encompasses both banknotes and coins, which together make up all the tangible forms of money that people can use to buy goods and services. Banknotes represent the paper currency issued by the central bank, while coins are the metallic currency that is also legally recognized as money. Thus, both forms are essential components of the currency in circulation.

In contrast, if one were to only consider just banknotes or just minted coins, it would not provide a complete understanding of the total currency available to the public. Therefore, recognizing both as part of the currency in the monetary base is crucial for accurately conceptualizing the entirety of what the public uses as money.