Relationship between m 1 velocity and m 2 velocity

Reference no: EM131144726

The chapter reviewed the different measures of money stock ( M 1 and M 2). You can use any of these money stock measures in order to determine the velocity of money. What is the relationship between M 1 velocity and M 2 velocity? Which is the largest and which is the smallest? Go to https://research.stlouisfed.org/fred2 . Download data for M1 and M2 stock by clicking on "Monetary Aggregates." Then, download GDP data (click on "Gross Domestic Product (GDP) and Components"). Divide the GDP series by the M1 (or M2) series, since velocity of M1 (or M2) is simply GDP divided by M1 (or M2) stock. Then, take a look at these two alternative velocity measures in order to confirm the answer you got for the previous question.

Reference no: EM131144726

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