If There Is an Increase in the Price of Oil

question 134

Multiple Choice

If there is an increase in the price of oil and the Fed wishes to maintain price stability,what should it do?

• A) Do nothing,because the self-correcting mechanism will adjust the economy
• B) Sell bonds in the open market
• C) Wait,because the price level seldom changes when there is an increase in the price of oil
• D) Encourage firms to not adjust the wages they pay
• E) Buy bonds in the open market.

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Definitions:

Intrinsic Motivation

Motivation driven by an interest or enjoyment in the task itself, and exists within the individual rather than relying on any external pressure.

Need for Competence

An individual's innate desire to be effective in dealing with the environment, feeling capable, and skilled.

Need for Self-Determination

The intrinsic motivation to be autonomous and in control of one’s own life, influencing behavior and psychological well-being.

Intrinsically Motivated

A type of motivation driven by an interest or enjoyment in the task itself, rather than relying on external pressures or rewards.