Calculate growth rate of m1 and m2?

Question

For finance class I need to calculate the growth rate of m1 and m2 for years 2007 and from Jan 2007 to Dec 2007. Unfortunately we haven't had class in a week because my professor was ill so we haven't learned this, and the homework is due this evening (June 2, 2008). How do I calculate the growth rates?

Answer 1

Seasonally adjusted averages:

..................M1......... M2

2006.....1371.47.... 6887.96

2007.....1369.02.... 7245.26

Index(M1)=1369.02/1371.47= 0.998214799

Index(M2)=7245.26/6887.96=1.051873783

Comparative state 2007 to 2006

(M1) 0.998214799   (M2)1.051873783

Change(M1)= -0.18%

Change(M2)= +5.19%

P.S. Please note that this calculation only for seasonally adjusted values - the same way you can do math for nonseasonally adjusted ones.

♦

Added:

Yep, you are right Iv'e accidently shifted one month to another period in calculating averages, I calculated all periods in 2006 except dec., and added this december to 2007 calculation, here are right corrected data:

Seasonally adjusted averages:

..................M1......... M2

2006.....1370.85.... 6905.95

2007.....1369.23.... 7263.04

Index(M1)=1369.23/1370.85= 0.998820683

Index(M2)=7263.04/6905.95= 1.051707827

Comparative state 2007 to 2006

(M1) 0.998820683   (M2)1.051707827

Change(M1)= -0.1179%

Change(M2)= +5.1708%

Answer 2

It's a percentage answer. What percentage is the sum from the previous sum and so on.

Answer 3

You need to know the Velocity of money to answer that question.