If a Price Shock Caused by a Sharp Increase in Oil

question 138

Multiple Choice

If a price shock caused by a sharp increase in oil prices is believed to be temporary, then the Fed will

• A)raise interest rates based on its monetary policy rule.
• B)lower interest rates based on its monetary policy rule.
• C)do nothing.
• D)lower interest rates, but not by as much as it would if the price shock were permanent.
• E)raise interest rates, but not by as much as it would if the price shock were permanent.

---

Definitions:

MBO

Management by Objectives; a performance management approach where managers and employees work together to set, record, and monitor goals for a specified period of time.

Objectives

Specific, measurable goals that an individual or organization aims to achieve.

Accomplishing

The act of achieving a goal or completing a task successfully.

Procedural Justice

The perception of fairness in the processes that lead to outcomes or decisions.