Two actions by the Fed during Alan Greenspan's term as chairman have been identified as possibly contributing to the financial crisis in 2008. Which of the following was one of those actions?
A) working in concert with the European Central Bank to stabilize the dollar / euro exchange rate
B) financing the first Gulf War by printing money and generating rapid inflation
C) decreasing the money supply to fight the possibility of disinflation
D) the decision to keep the federal funds rate at 1 percent from June 2003 to June 2004
D
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Demand-pull inflation is caused by
A) aggregate demand increasing along an upward sloping or a vertical aggregate supply curve. B) aggregate demand decreasing along an upward sloping or a vertical aggregate supply curve. C) aggregate demand increasing along a horizontal aggregate supply curve. D) aggregate demand decreasing along a horizontal aggregate supply curve.
The idea that in the market system, consumers ultimately decide which goods and services firms will produce is known as
A) socialism. B) monopolistic competition. C) consumer sovereignty. D) institutional competition.