In September 2008, the growth rate of the M1 money supply was zero, while the growth rate of the M2 money supply was about 5%. In July 2009, the growth rate of M1 was about 17%, and the growth rate of M2 was about 8%. How should Federal Reserve policymakers interpret these changes in the growth rates of M1 and M2?

Economics: Private and Public Choice (MindTap Course List)
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ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter14: Modern Macroeconomics And Monetary Policy
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In September 2008, the growth rate of the M1
money supply was zero, while the growth rate
of the M2 money supply was about 5%. In
July 2009, the growth rate of M1 was about
17%, and the growth rate of M2 was about
8%. How should Federal Reserve
policymakers interpret these changes in the
growth rates of M1 and M2?
Transcribed Image Text:In September 2008, the growth rate of the M1 money supply was zero, while the growth rate of the M2 money supply was about 5%. In July 2009, the growth rate of M1 was about 17%, and the growth rate of M2 was about 8%. How should Federal Reserve policymakers interpret these changes in the growth rates of M1 and M2?
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