Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Please use the table below to answer the following questions where: C = currency         D = demand deposits       ER = excess reserves         RR = required reserves       MB = monetary base         All numbers are in billions of $ US

Please use the table below to answer the following questions where: C = currency         D = demand deposits       ER = excess reserves         RR = required reserves       MB = monetary base         All numbers are in billions of $ US

Economics

Please use the table below to answer the following questions where:
C = currency        
D = demand deposits      
ER = excess reserves        
RR = required reserves      
MB = monetary base        
All numbers are in billions of $ US.    
           
Money Supply Data        
DATE C D ER RR MB
8/1/2008 776.9 625.9 1.875 43.915 872.291
8/1/2009 858.3 799.1 765.626 63.116 1728.125

FOR ALL CALCULATIONS OF THE MONEY SUPPLY USE THE EXPRESSION THAT WE DERIVED: THE MONEY MULTIPLIER x THE MONETARY BASE. DO NOT USE THE SIMPLE C + D DEFINITION TO CALCULATE MONEY SUPPLY. IN THEORY THEY ARE THE SAME, EMPIRICALLY, DUE TO LACK OF COMPLETE DATA, THEY DIFFER SLIGHTLY.

a)  Calculate the money multiplier and the money supply for August of 2008 (2008-08-01)

b)  Calculate the money multiplier and the money supply for August of 2009 (2009-08-01).

c) Explain why

1) the money multiplier is so different and

2) why the monetary base is so different between these two periods.

d) Calculate what the money supply would have been if the Fed increased the monetary base as they did from August of 2008 to August of 2009 but the money multiplier remained at its value in August of 2008.

Option 1

Low Cost Option
Download this past answer in few clicks

4.87 USD

PURCHASE SOLUTION

Already member?


Option 2

Custom new solution created by our subject matter experts

GET A QUOTE