What is the difference between base money and broad money, and how do they impact the overall economy?

Base money refers to the physical currency in circulation and the reserves held by banks at the central bank. Broad money, on the other hand, includes base money along with other types of money like deposits in banks. Base money directly affects the money supply, while broad money influences economic activity and inflation. Changes in base money can impact interest rates and inflation, while changes in broad money can affect consumer spending and investment, ultimately impacting the overall economy.