According to the Quantity Theory of Money (Chapter 3), the increase in the money supply from $39.7 billion in 1940 to $99.2 billion in 1945 should have fueled strong inflation. However, it did not because
(a) the World War II (1941–45) (WWII) economy was operating below full employment
levels of production.
(b) the WWII economy was operating at full employment levels of production.
(c) the WWII economy was operating above full employment levels of production.
(d) price controls prevented the surge in prices across the economy.
(a)
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Which of the following could be described as an aggregate demand-driven model of business cycles?
a. Keynesian model. b. monetarist model. c. New Keynesian model. d. classical model. e. a, b, and c.
A government policy that lets individuals put away money for retirement tax-free will
A) shift the demand curve for loanable funds rightward. B) crowd out private investment. C) shift the supply curve of loanable funds to the right. D) induce people to save less at any interest rate.