Explain why the rise in oil prices in 2008 created a particularly difficult situation for Federal Reserve policymakers.
Answer to relevant QuestionsAfter examining Figure 22.6, explain the potential link between innovations in financial markets and output volatility since the 1980s. You should consider both the “Great Moderation” and the recession of 2007-2009 in ...Suppose that consumer confidence unexpectedly rises six months before the central bank detects the change or its magnitude. Compared to your answer to Problem 11, what happens to inflation and output in that six-month ...Changes in oil prices shift the short-run aggregate supply (SRAS) curve. Consider how volatility in oil prices may influence the economy’s short-run equilibrium, which occurs at the intersection of the dynamic aggregate ...To keep inflation low and steady, central banks would like to keep output reasonably close to its potential level, but can they anticipate changes in potential GDP? Plot since 1960 the percent change from a year ago of the ...For each of the following, explain whether the response is theoretically consistent with a tightening of monetary policy and identify which traditional channel of monetary policy is at work: a. Firms become more likely to ...
Post your question