use to the graph to help determine which of the following statements regarding the growth rate of m1 and inflation are true.Directions: click on the graph in the window on the right and select Multiple Time Series to graph the 10-year moving averages for the rate of growth of M1 and the U.S. inflation rate for the years 1969-2004. For Y1 select Growth Rate of M1 (10 YR Mov. Avg.) and for Y2 select % Change in GDP Deflator (10 YR Mov. Avg.). Roll your cursor over the plotted lines to identify the data.The 10-year moving average was created by finding the average growth rate over the ten years prior. For example, the 1969 value of the rate of growth for M1 is the average growth rate of M1 for the years 1959-1969, and the value of M1 for 1970 is the average rate of growth of M1 during 1960-1970. The 10-year moving averages of money supply and inflation are utilized because of the strong conviction of monetarist economists that changes in money supply affect prices in the economy with lags, and thus should be analyzed for the medium run.Use to the graph to help determine which of the following statements regarding the growth rate of M1 and inflation are true.
