Please note that you only need to submit your 3 plots (i.e., only parts (c) of Question 1 and 2, and (d) of Question 3); it is suggested that you use MS Excel to create these plots, but you are welcome to use another application if you prefer. Each question is worth 1 mark.
1. This question will utilize data from the FRED database (fred.stlouisfed.org).
(a) Download (seasonally-adjusted) monthly observations on M1 for Canada from January 1960 1970 to January 2017. (HINT: From the FRED homepage, search for "M1 Canada", without the quotation marks.)
(b) Download (seasonally-adjusted) monthly observations on M3 for Canada from January 1960 1970 to January 2017.
(c) Using the data you obtained in parts (a) and (b) above, calculate and plot the ratio of M1 to M3 (i.e., M1 divided by M3).
2. This question will utilize data from the Bank of Canada (bankofcanada.ca).
(a) Download Government of Canada yield curve data for June 1, 1999. (HINT: Go to http://www.bankofcanada.ca/rates/interest-rates/bond-yield-curves/)
(b) Download Government of Canada yield curve data for December 1, 2009.
(c) Plot the data you obtained in parts (a) and (b) above in a single figure.
3. This question will again utilize data from the FRED database (fred.stlouisfed.org).
(a) Download annual observations on the CPI for Canada from 1971 to 2016. (HINT: Use the series labelled "Consumer Price Index: Total, All Items for Canada". You will know you have the correct series if the value is equal to 1 in 2010.)
(b) Download annual observations on the CPI for the U.S. from 1971 to 2016. (HINT: Use the series labelled "Consumer Price Index: Total All Items for the United States". You will know you have the correct series if the value is equal to 1 in 2010.)
(c) Download annual observations on the CAD / USD exchange rate from 1971 to 2016.
(d) Using the data you obtained in parts (a) to (c) above, calculate and plot the real CAD / USD exchange rate.