2. Here are annual values for M2 and for nominal GDP (all figures are in billions of dollars) for the mid-2000s.

Year M2 Nominal GDP

2003 6,055.5 $10,960.8

2004 6,400.7 11,685.9

2005 6,659.7 12,421.9

2006 7,012.3 13,178.4

2007 7,404.3 13,807.5

a. Compute the velocity for each year.

b. Compute the fraction of nominal GDP that was being held as money.

c. What is your conclusion about the stability of velocity in this five-year period?