Compute the ratio of m1 to gdp and the ratio of m2 to gdp

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Using the data on the text Web site, compute the ratio of M1 to GDP and the ratio of M2 to GDP. These ratios show how much money people hold relative to total spending in the economy.

Plot these ratios over the last 40 years. Have the ratios been steady, or have they risen or fallen? What might explain these trends?

Reference no: EM131220676

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