1. Suppose the M1 money supply is $12 billion, and the price level is 2.4. a. If the M2 money supply is $30 billion, what accounts for the difference? (6 points) b. What are the real M1 and M2 money supplies? (8 points) C. Suppose M2 doubles to $60 billion. If the quantity theory of money holds, what will the price level be next year? Does this imply inflation or deflation? (8 points) d. What would cause the quantity theory not to hold, and how would that affect your answer in (c)? (8 points) e. If the quantity theory does hold, and real income y doesn't change, what is the real M2 money supply once prices have fully adjusted? (7 points) f. If real GDP is $25 billion, what is the velocity of M2? (8 points) g. If the velocity of M2 falls, what does this indicate about the demand for money, and why? (5 points)