The Statement,"With a Permanent Adverse Supply Shock,the Government Should Engage

Multiple Choice

The statement,"With a permanent adverse supply shock,the government should engage in extinguishing policy changes," is true only if

A) the social costs of higher inflation are small and less than the social cost of less output.
B) the social costs of lost output are less than the social cost of permanently.
C) accommodating policy is impossible to conduct.
D) neutral policy is impossible to conduct.