The Fed increased the supply of US dollars at an average rate of 6 percent per year over the 1980-2005 period. Based on the theory of production capacity, if the Fed had instead increased the money supply at the rate of 7 percent per year during that period, given other policies: (Select all that apply.)The output of the economy in the mid-2000s would not have been very different from the levels it actually reached. The average inflation rate during 1980-2005 would have been one percentage point higher than it actually was in that period. The economy would have enjoyed a much higher level of output in the mid-2000s. The price level in 2005 would have been about 28 percent higher than what it actually reached in that year. Question 2 At the time of its independence in 1947, India was a very poor country with a very small stock of physical capital. Between 1947 and 1980, the government of India believed that the best way to improve the standard of living in that country was to increase investment and create more jobs with the existing technology. Importing advanced technology and encouraging cost-saving innovations were seen as unnecessary because the government believed that such developments would reduce the need for labor and contribute to unemployment. Other things equal, the consequence of this policy for the long-run growth of the