Given the strict quantity theory of money, if the quantity of money doubled, prices would:

Refer to Figure 13-4. Given the economy is at point A in year 1, what is the difference between the actual growth rate in GDP in year 2 and the potential growth rate in GDP in year 2?

A) 0.3% B) 1.1% C) 2.7% D) 3.7%

An economic policy has a decent chance of working as intended, if ________

A) the policy causes no change in expectations B) if mistaken expectations are not very costly C) the rationale behind the policy is well-understood by the public D) expectations are formed in the same way by both the public and the policymakers