3. The following table below the components of M1 and M2 in billions of dollars for the month of December in the years 2003 to 2013 reported by the Federal Reserve Bank of St. Louis. Complete the table by calculating M1, M2, currency in circulation as a percentage of M1, and currency in circulation as a percentage of M2. What trends or patterns about M1, M2, currency in circulation as a percentage of M1, and currency in circulation as a percentage of M2 do you see? What might account for these trends?
| Year | Currency in circulation |
Traveler’s checks |
Checkable deposits |
Savings deposits |
Time deposits |
Money market funds |
M1 | M2 | Currency in circulation as a percentage of M1 |
Currency in circulation as a percentage of M2 |
| 2003 | $662.5 | $7.6 | $635.9 | $3,159.0 | $818.1 | $752.8 | ? | ? | ? | ? |
| 2004 | 697.8 | 7.5 | 670.6 | 3,506.5 | 828.4 | 677.6 | ? | ? | ? | ? |
| 2005 | 724.6 | 7.2 | 643.0 | 3,601.6 | 993.7 | 682.4 | ? | ? | ? | ? |
| 2006 | 750.2 | 6.7 | 610.6 | 3,691.8 | 1,206.0 | 776.6 | ? | ? | ? | ? |
| 2007 | 760.6 | 6.3 | 608.1 | 3,864.1 | 1,276.0 | 930.6 | ? | ? | ? | ? |
| 2008 | 816.2 | 5.5 | 782.0 | 4,085.6 | 1,457.6 | 1,021.6 | ? | ? | ? | ? |
| 2009 | 863.7 | 5.1 | 825.3 | 4,809.3 | 1,183.1 | 781.2 | ? | ? | ? | ? |
| 2010 | 918.7 | 4.7 | 912.7 | 5,329.6 | 927.9 | 675.7 | ? | ? | ? | ? |
| 2011 | 1,001.2 | 4.3 | 1,154.3 | 6,032.8 | 767.0 | 663.7 | ? | ? | ? | ? |
| 2012 | 1,090.0 | 3.8 | 1,353.5 | 6,687.5 | 633.0 | 642.0 | ? | ? | ? | ? |
| 2013 | 1,159.5 | 3.5 | 1,475.8 | 7,133.0 | 555.6 | 640.9 | ? | ? | ? | ? |
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Data from: Federal Reserve Bank of St. Louis. |
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