Question 2 30 pts 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. Money Supply Data 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\fFOR 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. Use the text box below to fill in your answers to questions a through e. a) (5 points) Calculate the money multiplier and the money supply for May of 2008 (2008-05-01) b) (5 points) Calculate the money multiplier and the money supply for May of 2009 (2009-05-01). 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 May of 2008 to May of 2009 but the money multiplier remained at its value in May of 2008. e) (5 points) Given the conditions that prevailed during May of 2009, suppose the Fed wanted to increase the money supply by 10% from its value in May of 2009. What type and how many open market operations would they need to conduct? PLEASE type your answers to this question in the box below. You must show all work for full credit HTML Editor I l E o: h... c: :9 4 I! { EH |'|'| IIIII |I|I| kill kill X X I I 3 %' EH 09 ()9 Iii v'; [E ,1] TL 12pt v Paragrap