In which of the following situations did the three-part aggregate supply model not perform well?

a) Understanding the stagflation of the late 1960s and early 1970s

b) Understanding the post-World War II economic boom

c) Explaining the Great Depression

d) Managing the economy during World War II

In the late 1970s and early 1980s, as the Federal Reserve squeezed the growth of the money supply, interest rates shot up and

a) profits began to increase dramatically.

b) the unemployment rate plummeted.

c) the unemployment rate shot up as well.

d) the economy began to recover.

What problem may occur if an economy has too few banks or none at all?

a) The economy may "overheat" and inflation may become a problem.

b) The economy will be subject to periods of high unemployment alternating with periods of high employment but very high inflation.

c) The economy will support nearly the same standard of living as banks.

d) The economy will be underdeveloped, with a possible increase in unemployment and business failures.

What innovation did the Federal Housing Administration develop that helped make mortgage loans more accessible?

a) The guaranteed interest rate mortgage

b) The 20-year, adjustable rate mortgage

c) The 30-year, 50% down payment mortgage

d) The 30-year, fixed-rate mortgage

During World War I, the cost of living in the United States shot up 62%. Using more effective economic measures, the cost of living in the United States during World War II, from 1940 to 1945, increased by what percent?

a) 20%

b) 40%

c) 30%

d) 10%