Suppose the Economy Is Producing at the Natural Rate of Output

Multiple Choice

Suppose the economy is producing at the natural rate of output. An open market purchase of bonds by the Fed will cause ________ in real GDP in the long run and ________ in inflation in the long run,everything else held constant.

A) an increase;an increase
B) a decrease;a decrease
C) no change;an increase
D) no change;a decrease