When Supply Shifts Cause a Downturn in the Economy

Multiple Choice

When supply shifts cause a downturn in the economy,

A) monetary policy is more likely to restore the economy to its prerecession conditions.
B) inflation is not a concern.
C) the natural rate of unemployment decreases.
D) monetary policy can have no effect on the economy,even in the short run.
E) monetary policy is much less likely to restore the economy to its prerecession conditions.