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 Threasury bills fell from almost 3% to close to 0%. given thses high rates of money growth, why did interest rates fall, rather than increase?
a. the liquidity effect was working in the same direction as thei ncome, price-level, and expected inflation effects.
b. the income, price level, and expected inflation effects were large relative to the liquidity effect.
c. the liquidiity effect did not dominate the other effects as the liquidity preference framework would suggest.
d. the income, price level, and expected inflation effects were small relative to the liquidity effect.