FOR ALL CALCULATIONS OF THE MONEY SUPPLY USETHE EXPRESSION THAT WE DERIVED: THE MONEY MULTIPLIER x THE MONETARY BASE. DO NOT USE THE SIMPLE C + D DEFINITION TO CALCULATE MONEY SUPPLY. IN THEORY THEY ARE THE SAME, EMPIRICALLY, DUE TO LACK OF COMPLETE DATA, THEY DIFFER SLIGHTLY.

a) (5 points) Calculate the money multiplier and the money supply forJune of 2008 (2008-06-01)

b) (5 points) Calculate the money multiplier and the money supply forJune of 2009 (2009-06-01).

c) (10 points - 5 for each explanation) Explain why:

1) the money multiplier is so different and

2) why the monetary base is so different between these two periods.

d) (5 points) Calculate what the money supply would have been if the Fed increased the monetary base as they did from June of 2008 to June of 2009 but the money multiplier remained at its value in June of 2008.

e) (5 points) Given the conditions that prevailed during June of 2009, suppose the Fed wanted to increase the money supply by 10% from its value in June of 2009. What type and how many open market operations would they need to conduct?

PLEASE type your answers to this question in the box below.You must show all work for full credit

All numbers are in billions of $ US. Money Supply Data DATE C D ER RR MB 2008-01-01 758.1 614.1 1.648 43.243 851.360 2008-02-01 757.4 616.8 1.615 42.208 857.096 2008-03-01 759.2 623.2 2.645 41.129 860.652 2008-04-01 758.3 626.4 1.737 43.298 855.642 2008-05-01 762.4 623.7 1.838 45.036 860.669 2008-06-01 768.6 625.7 2.225 43.584 863.880 2008-07-01 774.9 637.8 1.913 44.064 871.630 2008-08-01 776.9 625.9 1.875 43.915 872.291 2008-09-01 7810 675.4 59.482 43.411 936.485 2008-10-01 796.6 6730 267.157 47.642 1142.181 2008-11-01 806.4 702.1 558.808 50.327 1480.767 2008-12-01 816.2 782.0 767.318 53.558 1669.264 2009-01-01 829.2 749.2 796.835 63.400 1730.163 2009-02-01 837.6 724.0 642.071 58.889 1590.160 2009-03-01 843.1 730.2 723.103 55.026 1668.485 2009-04-01 847.2 758.5 822.598 59.140 1787.706 2009-05-01 848.7 762.0 842.144 60.662 1799.221 2009-06-01 852.3 795.8 749.401 60.334 1704.005 2009-07-01 854.9 800.6 732.245 64.297 1693.740 2009-08-01 858.3 799.1 765.626 63.116 1728.125 2009-09-01 861.4 798.4 859.887 62.708 1819.743 2009-10-01 862.7 8113 994.502 62.214 1975.364 2009-11-01 861.9 815.0 1077.011 64.586 2044.667 2009-12-01 863.7 825.3 1075.199 65.251 2017.288