Question

Imagine the following: New sources of energy have become marketable and the industries involved have hired thousands to operate the emergence of new businesses. Construction companies cannot build homes fast enough for workers in the energy industry. Due to increasing salaries in several other industries that partner with energy companies, the demand for everything from food to entertainment to travel has increased. High demand has brought about shortages in some product categories. To help manage the situation in the short term, ________.

Answer 1

b) the Fed will likely increase interest rates

Step-by-step explanation:

Based on the scenario being described within the question it can be said that to help manage the situation in the short term, the Fed will likely increase interest rates. This usually occurs in a strong economy such as this one in order to try and keep the excesses that may occur under control. The opposite tends to happen when an economy needs support, in which the Fed cuts borrowing costs.