The Rapid Growth of Money Supply, M1 and M2, Between

Multiple Choice

The rapid growth of money supply, M1 and M2, between 2001 and 2006 was due, in part, to the:

A) federal government's response to the rise in foreclosures in the United States.
B) private banks hoarding cash because of a rise in the financial friction.
C) Fed's response to deflationary concerns.
D) sale of thousands of mortgages by Fannie Mae and Freddie Mac.
E) purchases of firms of their own stock.