Compared to an Initial Long-Run Equilibrium, an Aggregate Supply Shock

Multiple Choice

Compared to an initial long-run equilibrium, an aggregate supply shock that reduces potential output results in a(n) ________ gap in the short run and ________ output and ________ inflation in the long run.

A) recessionary; lower; higher
B) expansionary; lower; higher
C) expansionary; higher; higher
D) recessionary; potential; higher