After the OPEC oil price shocks in the 1970s, central banks responded by lowering interest rates because they thought this was a negative demand shock.

Question

Quizplus · Accepted Answer

Central banks believed that the increase in oil prices would decrease demand for goods and services, leading to lower inflation and requiring lower interest rates to stimulate borrowing and spending.

After the OPEC Oil Price Shocks in the 1970s, Central