According to the monetarists, which of the following is true?
A. Instability in the money supply is the primary cause of economic instability.
B. A reduction in the money supply will cause consumers to increase spending.
C. A reduction in the money supply will cause a proportional reduction in wages and prices, leaving output unchanged.
D. A rapid growth rate of the money supply will lead to a rapid growth rate of real GDP.
Answer: A
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All of the following were took place during the German hyperinflation in the 1920s EXCEPT
A) banks reduced lending. B) some banks only made loans to customers who agreed to repay in terms of foreign currencies or commodities. C) Deutsche Bank had to lay off many workers due to lack of business. D) households and firms increased their demand for loans.