Using the Economic Way of Thinking,explain Why Colonists Believed a Shortage

question 22

Essay

Using the economic way of thinking,explain why colonists believed a shortage of money could negatively impact their economy.Use the quantity theory of money (MV ? PQ)to explain why?a shortage of colonial money could either lead to negative economic growth (decrease in Q)or deflation (a decrease in P).Assume velocity (V)is stable or constant.According to the research of economic historians,did colonial America experience positive or negative growth? Did colonists experience inflation or deflation in the years leading up to the American Revolution? Does this evidence support the claim that there was a shortage of money in colonial America?

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Definitions:

Lymphatic Tissue

A part of the body's immune system, consisting of a network of tissues and organs that help rid the body of toxins and waste.

Microvilli

Structures found in the lining of the small intestine. They greatly increase the surface area of the small intestine so that it can absorb many nutrients.

Small Intestine

A long, coiled tube in the digestive system where most of the absorption of nutrients takes place.

Surface Area

The total area covered by the outer layer of an object, measured in square units.