In the aggregate-supply/aggregate-demand model based on the quantity theory of money, the aggregate: demand curve is vertical because money determines spending. demand curve is horizontal because velocity is assumed fixed. supply is horizontal because price level is assumed constant. supply is vertical because transactions are assumed fixed. Choose the most correct answer by clicking a button, or by typing a letter from the keyboard and pressing the tab key. In the late 19th century output in the U.S. grew rapidly but price level fell. How could this be explained in terms of the aggregate-supply/aggregate-demand curves based on the quantity theory of money? It cannot be explained because output is assumed to be constant in the quantity theory. The aggregate-supply curve shifted left because output increased and aggregate demand shifted right because money stock fell. Aggregate supply shifted substantially right because economic growth was strong and aggregate demand shifted hardly at all because monetary growth was very slow. Aggregate supply shifted hardly at all because money growth was slow while aggregate demand shifted significantly right because economic growth was strong. Choose the most correct answer by clicking a button, or by typing a letter from the keyboard and pressing the tab key.