1.3. The Federal Reserve regularly releases data on the U.S. monetary base. You can access that data at various websites, including the website for the Federal Reserve Bank of St. Louis. Go to http://research.stlouisfed.org/fred2/ and click on “Reserves and Monetary Base,” then on “Monetary Base,” and then on

“Board of Governors Monetary Base, Adjusted for Changes in Reserve Requirements” for the latest report. Use the Seasonally Adjusted (SA) series.

a. How much did the monetary base grow in the last month?

b. How did this help in the government’s efforts to finance its deficit?

c. Why is it important for the central bank to be independent from the part of the government responsible for spending?