Question: 1. Based on the empirical patterns in Figure I below, answer the following questions. Figure 1: M0 vs. M1,20052022 a) Based on the definitions of

1. Based on the empirical patterns in Figure I below, answer the following questions. Figure 1: M0 vs. M1,20052022 a) Based on the definitions of MO and M1, explain the reason why M0 may be latger than M1 in theosy. b) Analyze possible economic forees that could drive M0 to be larger than M1 in reality. (Hint: the deposit creation process in the banking system.) c) According to your analyses in the previous two parts, what are the likely causes for M0 exceeding MI after the financial crisis in 2008 ? Explain yoor reasoning. as rigorously and concisely as possible. Use real-world data to back op your arguments if necessary

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