-Start from any equilibrium in Figure 12.5 to answer the following question.In 1980,U.S.inflation hit about 14 percent;Federal Reserve chairman __________ engineered a decline in inflation by __________,shown in the figure as movement from __________.
A)Volcker;raising inflation rates;b to c
B)Bernanke;raising interest rates;b to d
C)Volcker;lowering interest rates;c to b
D)Volcker;raising interest rates;b to c
E)Greenspan;lowering interest rates;a to b

Question

-Start from any equilibrium in Figure 12.5 to answer the following question.In 1980,U.S.inflation hit about 14 percent;Federal Reserve chairman __________ engineered a decline in inflation by __________,shown in the figure as movement from __________.
A)Volcker;raising inflation rates;b to c 
B)Bernanke;raising interest rates;b to d 
C)Volcker;lowering interest rates;c to b 
D)Volcker;raising interest rates;b to c 
E)Greenspan;lowering interest rates;a to b

Quizplus · Accepted Answer

Paul Volcker, as Federal Reserve chairman, engineered a decline in inflation by raising interest rates, which is represented as a movement from b to c in the figure.

-Start from Any Equilibrium in Figure 12