Which of the Following Scenarios Will Result in the Largest

Multiple Choice

Which of the following scenarios will result in the largest reduction in inflation at the lowest cost in terms of a reduction in output?

A) monetary restriction combined with fiscal expansion
B) monetary restriction implemented after an oil price decrease
C) monetary expansion combined with fiscal contraction
D) a spending cut combined with a tax cut of equal magnitude
E) a sharp reduction in monetary growth after an oil price increase