In 2008 and 2009, the Quantity Theory of Money Did

question 192

Multiple Choice

In 2008 and 2009, the quantity theory of money did a ________ job of predicting year-to-year changes in the inflation rate because ________.

• A) poor; velocity of circulation plunged
• B) poor; the Fed changed the growth rate of the quantity of money too quickly
• C) good; real GDP remained stable
• D) good; interest rates behaved predictably
• E) poor; the price level and the velocity of circulation did not change

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Definitions:

Balkan Crisis

A series of ethnic and political crises that arose following the dissolution of Yugoslavia in the 1990s. Many atrocities were committed during the conflict, and NATO, the United Nations, and the United States intervened several times.

President Clinton

William Jefferson Clinton, who served as the 42nd President of the United States from 1993 to 2001, known for his policies on the economy and social issues.

NATO

The North Atlantic Treaty Organization, a military alliance formed in 1949 between North American and European countries for mutual defense against aggression.

Economic Reform

A process where changes are made to the policies and regulations of a country's economic system to improve its efficiency and productivity.