This question pertains to the material in the chapter about the money supply process. Please refer to the data in the tab MBASE

Using the material in the textbook, define the concept of the money multiplier be sure to include the idea that this definition includes a measure of the monetary base and a measure of the money supply. Also in this definition includes terms like currency holding by the public and excess reserves held in the banks.

Using the data in the tab MBASE in the file ASSGN02.xlsx calculate for each of the following years your estimate of the money multiplier. Put your answers in a table with an appropriate title and identified columns where the rows in the table are designated as the requested years which are: 1960, 1970, 1980, 1990, 2000, 2007, 2008, 2009, 2010, 2020, 2021. Note that the provided data is monthly and the requested table is yearly. So you need to do some averaging to make it relevant. The averaging can be done in a Pivot table or it can be done by hand with a formula or by cutting and pasting.

In the table that you made for part b. above, do you see a trend or a change? If so, when do you see that change and what caused that change? Fully explain

Using the data in the tab MBASE estimate the regression M1 = B0 + B1*MBASE over the period from January 1959 to January 1970. Interpret the estimate of the variable B1, is this a measure of the money multiplier? Fully explain.