If the Long-Run Equilibrium of an Economy Is Disrupted by an Unexpected

Multiple Choice

If the long-run equilibrium of an economy is disrupted by an unexpected shift to a more expansionary monetary policy, the policy shift will

A) reduce aggregate demand and real output in the short run.
B) lead to a higher rate of unemployment in the short run.
C) stimulate real output in the short run, but in the long run, its primary impact will be on the general level of prices.
D) lead to an increase in the general level of prices in the short run, but in the long run, its primary impact will be an expansion in real output.