Final answer:
In an economy with a monetary base of $1,000 where all money is held as currency, the money supply is also $1,000, as there is no banking system to create a multiplier effect.
Step-by-step explanation:
If an economy has a monetary base of $1,000, and all money is held as currency, then the money supply in this scenario is simply $1,000. This is because the monetary base in this context refers to the total amount of currency in circulation, which includes coins, bills physically circulating in the economy, and reserves held by banks. Monetary aggregates like M1 include this physical currency as well as checking account balances. As there are no bank reserves to consider in this scenario (since it's all held as currency, and there are no deposits mentioned), there is no multiplication effect through the banking system, and therefore, the money supply remains equal to the monetary base.