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Assume that the Fed adopts an inflation-targeting strategy. If oil prices rise abruptly by 15 percent in response to an oil shortage, describe how the

Assume that the Fed adopts an inflation-targeting strategy. If oil prices rise abruptly by 15 percent in response to an oil shortage, describe how the Fed's monetary policy would be affected by this situation. Do you think the inflation-targeting strategy would be more or less effective in this case than if the Fed balances its inflation concerns with unemployment concerns? Explain.

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