When the Fed Purchases Additional Securities and Shifts to a More

Multiple Choice

When the Fed purchases additional securities and shifts to a more expansionary monetary policy,

A) the inflation rate will rise almost immediately.
B) the growth of output and employment will increase quickly.
C) several months will typically pass before the shift in policy exerts much impact on output and employment.
D) this policy will eventually lead to a decline in the general level  of prices if it is continued for a prolonged period of time.