Type
Essay
Pages
2 pages
Word Count
253 words
School
university
Course Code
Money and banking

Assignment

June 7, 2021
Monetary Aggregates: M1, M2 and M3
Analysis of the growth rate movement
Year
M1
M2
M3
2016
16.05%
14.50%
13.07%
2017
15.34%
14%
12.50%
2018
10.23%
9.50%
8.80%
2019
9.90%
10.76%
10.30%
All the calculations are done by using the following formula of growth rate;
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑦𝑒𝑎𝑟−𝐵𝑎𝑠𝑒 𝑦𝑒𝑎𝑟
𝐵𝑎𝑠𝑒 𝑦𝑒𝑎𝑟 X 100
Starting from the first base year; 2015
The line graph below shows the movement of the growth rates for 2016-2019.
The y-axis denotes the years while we have the percentage on the x-axis.
ANALYSIS:
If we talk about M1 which comprises of notes in circulation and transferable deposits. An
increase in the circulation of currency signals to inflationary pressures. We can see that the
growth rate in 2016 was 16.05% which reduced to 9.90% in 2019, and kept on declining in
the middle years while M1 is increasing. It is because the banks are lending more and
0.00%
5.00%
10.00%
15.00%
20.00%
2016 2017 2018 2019
CHART TITLE
M1 M2 M3

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