Prior to the Recession Which Began in Late 2007, the Federal

question 53

Multiple Choice

Prior to the recession which began in late 2007, the Federal Reserve purchased ________ of the government budget deficit.

• A) none
• B) a small portion
• C) about 50 percent
• D) all

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Definitions:

Free-Market System

An economic system based on supply and demand with minimal governmental control, where prices are determined by the interactions between consumers and businesses.

Marxist Economy

An economic system based on the socio-economic theories of Karl Marx, focusing on the role of labor in the development of an economy and the concept of class struggle.

Planned Economy

An economic system where the government controls and regulates production, distribution, and prices.

Laissez-Faire Economy

an economic system with minimal government intervention, where transactions are dictated by private parties.