Question

POLICY PERSPECTIVES From the end of 2016 to the end of 2017, M1 changed from $3,596 billion to $3,745 billion.

Instructions: Round your responses to one decimal place. If M1 decreased be sure to include a negative sign (−) in front of that number.

By what percentage did M1 change?
%

If the Fed had used a fixed rule of 3 percent growth of the money supply (M1), how large would M1 have been in 2017?
$
billion

Answer 1

M1 changed by 5.6%, from $3,596 billion to $3,745 billion. If the Fed had used a fixed rule of 3 percent growth of the money supply (M1), M1 would have been $3,687.88 billion in 2017.