One would expect the crude quantity theory of money to best predict the effect of an increase in the money supply during periods

Question

Quizplus · Accepted Answer

The crude quantity theory of money suggests that increases in the money supply will lead directly to proportional increases in the price level when the economy is at full employment. At full employment, additional money in the economy cannot stimulate further production due to the lack of available resources, leading instead to inflation.

One Would Expect the Crude Quantity Theory of Money to Best