Impact of inflation targeting by the fedassume that the fed, Ask an Expert

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Impact of Inflation Targeting by the Fed:

Assume that the Fed adopts an inflation targeting strategy. Describe how the Fed's monetary policy would be affected by an abrupt 15 percent rise in oil prices in response to an oil shortage.

Do you think an inflation targeting strategy would be more or less effective in this situation than a strategy of balancing inflation concerns with unemployment concerns? Explain.

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