In the Short Run, If the Fed Responds to a Negative

Multiple Choice

In the short run, if the Fed responds to a negative real shock by raising the growth rate of money supply, inflation will be

A) lower than the rate without responding to the negative shock.
B) higher than the rate without responding to the negative shock.
C) the same as the rate without responding to the negative shock.
D) lower or higher than the rate without responding to the negative shock, depending on the size of money supply growth.