What is meant by 'Coins and Currency in Circulation'?

'Coins and Currency in Circulation' refers to the physical money that is actively used in the economy for transactions. This includes all coins and paper money that are available for individuals and businesses to spend, excluding any that are held in bank vaults or by the US Treasury.

In this context, when defining 'in circulation,' it is important to note that it specifically means money that is circulating among the public and is readily available for trade and purchases. This amount can fluctuate with economic activity, as it reflects the amount of physical cash that the public holds and uses, impacting liquidity and spending behavior in the economy.

The other options do not accurately capture this concept. Funds stored in bank vaults are not in circulation because they are not available for immediate transactions by the public. Digits on a bank statement refer to electronic money or deposits, which, while crucial to the economy, do not represent physical currency. Gold reserves held by the Federal Reserve are assets that back currency but are not part of the currency that individuals and businesses use in their day-to-day transactions. Thus, the correct definition is specifically about the coins and paper money that are actively circulating amongst the public.