William mcchesney martin, who was federal reserve chairman from 1951 to 1970, was once quoted as saying, "the role of the federal reserve is to remove the punchbowl just as the party gets going." when he said "to remove the punchbowl," he meant to engage in (contractionary/expansionary) policy. in terms of the economy, "just as the party gets going" refers to a situation in which a real gdp (great than/less than) potential gdp, which will result in (increase in/decrease in) the inflation rate.

Stormie zanzibar owns a bakery in the fictitious country of olombia. each month the government’s market ministry mails her a large list of the regulated price of goods which include products like bread, muffins and flat bread. the list also dictates the types of goods she can sell at the bakery and what she is to charge. because of the regulations placed on these goods, stormie has increased her production of sweets, pies, cakes, croissants and buns and decreased her supply of breads, muffins and flat bread. she has taken these steps because the sweet goods’ prices are not government controlled. stormie zanzibar lives under what type of economy?