EBK THE ECONOMICS OF MONEY, BANKING AND
EBK THE ECONOMICS OF MONEY, BANKING AND
4th Edition
ISBN: 8220100668203
Author: Mishkin
Publisher: PEARSON
Question
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Chapter 17, Problem 2DAP
To determine

Go to the St. Louis Federal Reserve FRED database and find data on the M1 Money Stock (M1SL) and the Monetary Base (AMBSL).

  1. The value of the money multiplier using the most recent data available, and the data from five years prior.
  2. Based on your answer to part (a), how much would a $100 million open market purchase of securities affect the M1 money supply today versus five years ago?

Concept introduction:

    Money Multiplier=M1SL/AMBSL

    M1SL (M1 Money Stock) most recent value = $3,317.2 billion

    M1SL (M1 Money Stock) value five year prior = $2,110.5 billion

    AMBSL (St. Louis Adjusted Monetary Base) most recent value = $3,842.516 billion

    AMBSL (St. Louis Adjusted Monetary Base) value five year prior = $2680.451 billion

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