The rapid rise in oil prices during 2007-2008 can be explained by noting the fact that
a. the supply of oil increased more rapidly than the demand for oil increased
b. the demand for oil increased more rapidly than the supply for oil increased
c. the demand for oil decreased at the same time that the supply of oil increased
d. the quantity demanded of oil increased more rapidly than the quantity supplied of oil increased
e. the quantity supplied of oil increased more rapidly than the quantity demanded of oil increased
B
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Describe, in general terms, the strategy of monetary policy, explaining how monetary-policy tools are used to achieve the goals of monetary policy
What intermediate stages are important in going from tools to goals? What are the links between the different stages? How does the Federal Reserve use this strategy today?
The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.