If the Fed Decides to Tighten Monetary Policy Because the Inflation

Multiple Choice

If the Fed decides to tighten monetary policy because the inflation rate has risen to a level inconsistent with economic efficiency and long-term growth:

A) in the short run the SRAS curve will shift downward and a recessionary gap is created.
B) in the long run the AD curve will shift to the left and the long-run equilibrium is restored.
C) in the short run the AD curve shifts to the left and a recessionary gap is created.
D) in the short run the AD curve shifts to the right and a recessionary gap is created.