Question
Answer the following questions related to the FRED. (https://fred.stlouisfed.org/) 4.1. To what extent has the Federal Reserve monetized government debt? Plot since 1970 the change
Answer the following questions related to the FRED. (https://fred.stlouisfed.org/)
4.1. To what extent has the Federal Reserve "monetized" government debt? Plot since 1970 the change from a year ago (measured in billions of dollars) in gross federal debt (FRED code: FYGFD) and the change from a year ago (measured in billions of dollars) in the federal debt held by the Federal Reserve System (FRED code: FDHBFRBN). (In the "Units" box, specify "Change from Year Ago, Billions of Dollars" for both indicators)
4.2. There was a sharp decline of the M1 money multiplier in 2008. What caused the drop? Using the indicators for currency (FRED code: CURRSL), total reserve balances maintained (FRED code: RESBALNS), reserve balances required (FRED code: RESBALREQ), and checkable deposits (FRED code: TCDSL), plot since 2000 the currency-to-deposit ratio and the excess reserve-to-deposit-ratio. Which one caused the M1 money multiplier to plunge?
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