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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The world price of steel is $100 a ton. Before international trade, the price of steel in India is $60 a ton. If India begins trading internationally, the price of steel in India ________ and steel mills in India ________ the quantity they produce
A) rises; increase B) falls; increase C) does not change; increase D) rises; decrease E) falls; decease
Edward Denison's analysis of the American economy found that
A) total factor productivity was the largest source of economic growth since 1948. B) the contribution of labor growth has been more variable than the contribution of capital growth. C) productivity growth has been positive over every period of more than five years since WorldWar II. D) the contribution of labor growth has been greater than the contribution of capital growth.
GDP is the market value of all final goods and services produced within a country in a given period of time
a. True b. False Indicate whether the statement is true or false
The tools of monetary policy for altering the reserves of commercial banks are the:
a. Tax rate and level of government spending b. Public debt, budget surplus, and budget deficit c. Discount rate, reserve ratio, and open-market operations d. Consumer price index and unemployment rate