Please answer each sub questions. Thanks!
https://fred.stlouisfed.org/series/M2SL
https://fred.stlouisfed.org/series/CPIAUCSL
https://fred.stlouisfed.org/series/GDPCA
Homework: Money Growth and Inflation | Q1 Money and prices in the short-run 7 Points In response to the Great Recession of 2007-2009, the Federal Reserve dramatically expanded the supply of money in the US. Download the following data from FRED: . M2 Money Stock (M2SL): https://research.stlouisfed.org/fred2/series/M2SL . Consumer Price Index for All Urban Consumers (CPIAUCSL): http://research.stlouisfed.org/fred2/series/CPIAUCSL . Real Gross Domestic Product (GDPCA): https://research.stlouisfed.org/fred2/series/GDPCA Be sure that the data frequencies for M2 and the CPI are monthly and that the data frequency for real GDP is annual. Set the date range for each series to January 1, 2005 to January 1, 2020. Do the following. Q1.1 1 Point Plot M2 for the US from January 1, 2005 to January 1, 2020. Make sure that your graph is titled clearly.01.4 1 Point Compute the average annual growth rate of the CPI for the US over the 2005 2020 period using the following formula: 4 . M 9X _ 202072005 log (XJan.1,2005) ' where X is the CPI. Report your answers as decimals rounded to at least three decimal places. (E.g., if the growth rate is 50 percent, enter 0.500.) Enter your answer here Save Answer 01.5 1 Point Compute the average annual growth rate of real GDP for the US over the 2005 2020 period using the following formula: _ 1 _ XJan. 1, 2020 9X 20202005 103 (XJan.1,2UU5) ' where X is real GDP. Report your answers as decimals rounded to at least three decimal places. (E.g., if the growth rate is 50 percent, enter 0.500.) 01.6 1 Point Use the average rates of money and real GDP growth for the US from 2005 to 2018 to compute the average rate of inflation implied by the quantity theory of money. By how much does the quantity theory of money over-predict the actual rate of inflation? Enter your answer here Save Answer 01.7 1 Point What assumption underlying the quantity theory of money is causing the theory to not well- explain the observed relationship between money growth, real GDP growth, and inflation from 2005 to 2018? Enter your answer here 01.2 1 Point Plot the CPI for the US from January 'I, 2005 to January 1, 2020. Make sure that your graph is titled clearly. Upload an image of your answer as a jpeg, png, or pdf file. '3 Please select file(s) Select filels) Save Answer 01.3 1 Point Compute the average annual growth rate of M2 for the US over the 2005 2020 period using the following formula: _ _ M 9X 20202005 10g (XJan.1,2005) ' where X is M2. Report your answers as decimals rounded to at least three decimal places. (E.g., if the growth rate is 50 percent, enter 0.500.)
