Econ 2313 Looking Glass Assignment 4 Monetary base, Money supply and money multiplier. FRED - Monetary Base; Total (DISCONTINUED) (left) - M1 Money Stock*1000 (left) - Monetary Base; Currency in Circulation (left) - Total Reserve Balances Maintained with Federal Reserve Banks (DISCONTINUED)*1000 (left) - M1 Money Multiplier (DISCONTINUED) (right) 5,000,000 3.0 4,000,000 2.5 Millions of Dollars . Bil. of $*1000 3.000,000 2.0 Ratio 2,000,000 15 1.000,000 1.0 2000 2005 2010 2015 0.5 2020 Sources: Board of Governors, St. Louis Fed myf.red/g/wPaq This graph plots the monetary base (blue line), MI money stock (red line), reserve balances of depository institutions (purple line), currency in circulation (brown line) and MI money multiplier (green line with Y axis on the right) from mid 1990s to early 2020s. It reflects a significant shift in the monetary policy since 2008. 1. a. Why has the monetary base increased drastically since 2008? b. What component of the monetary base seem to have increased significantly? c. What non-traditional tools of monetary policy that the Federal Reserve used resulted in this change