M1 money growth in the U.S. was about 16% in 2008, 7% in 2009, and 9% in 2010. Over the same time period, the yield on 3-month Treasury bills fell from almost 3% to close to 0%. Given these high rates of money growth, why did interest rates fall, rather than increase? Explain by drawing a graph. Explain in simple and understanable terms please and shortly.
M1 money growth in the U.S. was about 16% in 2008, 7% in 2009, and 9% in 2010. Over the same time period, the yield on 3-month Treasury bills fell from almost 3% to close to 0%. Given these high rates of money growth, why did interest rates fall, rather than increase? Explain by drawing a graph. Explain in simple and understanable terms please and shortly.
Chapter1: Making Economics Decisions
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
Transcribed Image Text:M1 money growth in the U.S. was about 16% in 2008, 7% in 2009, and 9% in
2010. Over the same time period, the yield on 3-month Treasury bills fell from
almost 3% to close to 0%. Given these high rates of money growth, why did
interest rates fall, rather than increase? Explain by drawing a graph. Explain in
simple and understanable terms please and shortly.
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