Using data from the St. Louis Federal Reserve
(FRED) (http://research.stlouisfed.org/fred2/),
analyze the money supply.
a. Find data from FRED for the M1 Money
Stock (M1SL) and the M2 Money Stock
(M2SL) from 1959 to the present
b. Using the data found above, calculate M1 as
a proportion of M2 for each of the years.
c. Explain whether this proportion has
increased, decreased, or remained the same
over time.
Q338: Using data from the St. Louis Federal Reserve
(FRED) (http://research.stlouisfed.org/fred2/),
analyze the money supply.
a. Find the most recent values from FRED for
the M1 Money Stock (M1SL) and the St.
Louis Adjusted Monetary Base (AMBSL).
b. Using the data found above, calculate the
value of the money multiplier.
c. Assuming the multiplier is equal to the
value computed in part (b), if the monetary
base increases by $400 million, then by how
much will the money supply increase.