Overview
The table below shows hypothetical values, in billions of dollars, of different forms of money.
a. Use the table to calculate the M1 and M2 money supplies for each year, as well as the growth rates of the M1 and M2 money supplies from the previous year.
2019 | 2020 | 2021 | 2022 | ||
A. | Currency | 900 | 920 | 925 | 931 |
B. | Money market mutual fund shares | 680 | 681 | 679 | 688 |
C. | Saving account deposits | 5,500 | 5,780 | 5,968 | 6,105 |
D. | Money market deposit accounts | 1,214 | 1,245 | 1,274 | 1,329 |
E. | Demand and checkable deposits | 1,000 | 972 | 980 | 993 |
F. | Small denomination time deposits | 830 | 861 | 1,123 | 1,566 |
G. | Traveler’s checks | 4 | 4 | 3 | 2 |
H. | 3-month treasury bills | 1,986 | 2,374 | 2,436 | 2,502 |
b. Go to the web site of the St. Louis Federal Reserve Bank FRED database and find monthly data on seasonally adjusted measures of M1 and M2. Using the FRED graphing utility (not the EXCEL add-in), graph the annual (year-over-year) growth rates of M1 and M2 for the sample period 1989-2019. Include your graph in your submission.