2008

Currency component of M1=760.6

Demand Deposits= 606.1

Excess Reserves=1.785

Required Reserves=41.678

2007

Currency component of M1=816.2

Demand Deposits=779.3

Excess Reserves=767.318

Required Reserves=53.558

a)(5 points) Calculate the MI money multiplier for December of 2007 and for December of 2008.

b)(5 points) Explain why the multiplier has changed the way it did and was this change anticipated by the Federal Reserve, why or why not?

c)(5 points) What has happened to the relationship between C/D = c and the money multiplier = m between 12/07 and 12/08?

(10 points) Use the link below to answer the following question: