A1 Answer Money Aggregates

A1 Answer Money Aggregates - M2 = 9664.8 bil $ Base =...

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A1 (7-2-2011) US Money Stock Measurement Data from St. Louis FED FRED II. The purpose of this assignment is to have you become familiar with the data of the major economic variables we will deal with in the class. Look at the URL’s for the various statistical series and then answer 1) through 4). In part 2) Portfolio, Just view the listed three URL’s so that you are basically familiar with them. We will discuss these further in class. Look at these URL’s and become familiar with the numbers that measure various economic aggregate variables. To complete the assignment, create a word document with the following and paste it in the assignment comment box. From their respective chart 1) Estimate the value of M2 and Monetary Base.
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Unformatted text preview: M2 = 9664.8 bil $; Base = 2603.6 bil $ Compute the ratio of M2 to money base. = 9664.8/2603.6 = 3.71 ( Money multiplier) Estimate the value of C urrency and compute C/M2 = 998/2603.6 = .38 ( currency ratio) 2) Estimate the value of GDP and calculate the ratio GDP/ M2 = 15176.1/9664.8 = 1.57 (Flow of output to money ratio) 3) Describe the trends of GDP and M2 a. Gdp grew annually from -4% to 20% b. M2 grew annually from 0% to 12.5% 4) Examine the difference in in growth between M2 and Real GDP. Observe M2 is growing faster than real GDP. On average, M2 grew about 2 - 3 % faster than real gdp. What does this difference mean for the economy? On average this will predict 2-3% inflation....
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This note was uploaded on 02/22/2012 for the course MANEC 453 taught by Professor Jerrynelson during the Winter '10 term at BYU.

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