If the Fed Is Worried About Inflation and Raises Interest

Multiple Choice

If the Fed is worried about inflation and raises interest rates, then in the short run

A) the aggregate demand curve will shift to the left.
B) the aggregate demand curve will shift to the left, and the inflation adjustment line will shift down because the target inflation rate has decreased.
C) the inflation adjustment line will shift down because the target inflation rate has decreased.
D) the inflation adjustment line will shift up because the target inflation rate has increased.
E) the aggregate demand curve will shift to the right.