After you have studied Economics in the News on pp. 584 – 585 , answer the following questions. a. What changes in the interest rate and the quantity of M2 occurred between 2007 and 2014? b. When...

After you have studied Economics in the News on

pp. 584 – 585 , answer the following questions.

a. What changes in the interest rate and the

quantity of M2 occurred between 2007 and

2014?

b. When the interest rate fell, why did the quantity of M2 demanded increase?

c. How would you interpret the growth of M2

and the inflation rate during the years 2009–

2014 using the quantity theory of money?

d. Why does Jim Morrow fear inflation when

there was no sign of an upturn in its measured

rate in 2014?

e. Why might Jim Morrow nonetheless be correct in his concern?