Question
For these questions ONLY USE THE RELEVANT DATA SOURCE BELOW AND IN THE EXPLAINATION PLEASE SHOW HOW/WHERE YOU GOT YOUR ANSWER: https://fred.stlouisfed.org/(Links to an external
For these questions ONLY USE THE RELEVANT DATA SOURCE BELOW AND IN THE EXPLAINATION PLEASE SHOW HOW/WHERE YOU GOT YOUR ANSWER:
- https://fred.stlouisfed.org/(Links to an external site.)(FRED: Federal Reserve Economic Data).
Question 1: By how much did the money supply measured as M2 increase between February 2020 and April 2020? Please utilize FRED's M2 (Monthly, in Billions of Dollars, Not Seasonally Adjusted) data series (series code M2NS) to obtain your data.
Question 2: Examining the historical trajectory of money supply M2, how long did it take for the money supply to increase from $5 trillion to $6 trillion (in years)? Please continue utilizing FRED's M2 (Monthly, in Billions of Dollars, Not Seasonally Adjusted) data series (series code M2NS) to obtain your data.
Question 3: What percentage of the February to April 2020 increase in M2 that you computed in Question 16 can be attributed to an increase in the monetary base (money in circulation)? Please utilize FRED's Monetary Base Total data series (series code BOGMBASE) to obtain your data. Please be mindful of any possible differences in the units of measurement between the two series.
Question 4 : What percentage of the February to April 2020 increase in M2 that you computed in Question 16 can be attributed to an increase in the money market funds shares (compare 2020Q1 and Q2)? Please use FRED's MMMFFAQ027S series ("Money Market Funds; Total Financial Assets, Level") to obtain your data.
Question 5: Based on the quantity theory of money, which of the following statements about the potential effects of rapid increase in money supply M2 in early 2020 is (are) true?
A. If total expenditure did not change, the velocity of circulation had to go down.
B. If the velocity of circulation was constant, then either prices or output or both had to go up.
C. If output and the velocity of money went down, the effect on prices is unclear.
D. All of the above
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