alue: 10.00 points Why do you think the surge in oil prices in 2007-2008 had a much smaller impact on inflation expectations compared with the oil price shocks of the 1970s? O The response of inflation expectations to changes in economic conditions depends to a large extent on the credibility of the monetary policymaker, and the smaller impact of the 2007-2008 surge in oil prices compared with the 1970s lkely reflects the greater credibility of the central bank in the later period. Because inflationary expectations were well-anchored, transitory changes in input costs did not undermine expectations. O The response of inflation expectations to changes in economic conditions depends to a large extent on the credibility of the monetary policymaker, and the smaller impact of the 2007-2008 surge in oil prices compared with the 1970s likely reflects the greater credibility of the central bank in the 1970s. Because of this credibility, people felt more comfortable adjusting their expectations in response to the oil shocks. During the 2007-2008 period, people were just too distracted by other developments to even notice that oil prices had risen and that was the only reason inflationary expectations did not adjust to the extent they did in the 1970s. O The smaller response of inflationary expectations in 2007-2008 compared with the 1970s is simply random