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Stability due to expectations about fed policy

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Question: From late 1998 to mid-2000, benchmark crude oil prices tripled, from $10 to $30/bbl. The US uses approximately 18 million barrels of oil per day, or about 7 billion barrels per year, so consumers directly and indirectly paid an extra $140 billion for oil. Yet the core rate of inflation remained virtually unchanged. To what extent was that stability due to expectations about Fed policy, and to what extent was it due to other factors?

Reference no: EM131737763

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