Please use the table below to answer the following questions where C currency D demand deposits ER excess reserves RR required reserves MB monetary base All numbers are in billions of $ US 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 01 781 0 675 4 59 482 43 411 936 485 2008 10 01 796 6 673 0 267 157 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 7 811 3 994 502 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 FOR ALL CALCULATIONS OF THE MONEY SUPPLY USE THE 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 for June of 2008 (2008 06 01) b) (5 points) Calculate the money multiplier and the money supply for June 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

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Please use the table below to answer the following questions where: C = currency D = demand deposits ER = excess reserves RR = required

Please use the table below to answer the following questions where:

C = currency

D = demand deposits

ER = excess reserves

RR = required reserves

MB = monetary base

All numbers are in billions of $ US.

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	781.0	675.4	59.482	43.411	936.485
2008-10-01	796.6	673.0	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	811.3	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

FOR ALL CALCULATIONS OF THE MONEY SUPPLY USE THE 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 for June of 2008 (2008-06-01)

b) (5 points) Calculate the money multiplier and the money supply for June 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?