1.3. The table below shows the components of M1 and M2 in billions of dollars for the month of December in the years 1998 to 2007 as published in the 2008 Economic Report of the President. 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?

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Time deposits Currency Money smaller Year in circulation Traveler's Checkable checks market than Savings Currency Currency in circulation as a percentage in circulation as a deposits funds $100,000 (billions of dollars) deposits M1 M2 of M1 percentage of M2 1998 $460.5 $8.5 $626.5 $728.9 $952.4 $1,605.0 ? ? ? ? 1999 517.8 8.6 596.2 819.7 956.8 1,740.3 ? ? ? ? 2000 531.2 8.3 548.0 908.0 1,047.6 1,878.8 ? ? ? ? 2001 581.2 8.0 592.6 962.3 976.5 2,312.8 ? ? ? ? 2002 626.3 7.8 585.6 885.3 896.0 2,778.2 ? ? ? ? 2003 662.5 7.7 635.9 777.4 818.7 3,169.1 ? ? ? ? 2004 697.6 7.5 671.2 697.1 829.9 3,518.3 ? ? ? ? 2005 723.9 7.2 643.4 699.9 995.8 3,621.4 ? ? ? ? 2006 748.9 6.7 611.4 799.4 1,170.4 3,698.6 ? ? ? ? 2007 759.0 6.3 599.2 976.1 1,216.8 3,889.8 ? ? ? ? Source: 2008 Economic Report of the President.