According to the Quantity Theory of Money (Chapter 3), the increase in

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.

ANSWER

(a)