Suppose There Is a Temporary Supply Shock Because of a War

Multiple Choice

Suppose there is a temporary supply shock because of a war in the Middle East,then,ceteris paribus,the ensuing cost push shock ________.

A) would lead to a temporary increase in prices due to a restriction in the supply of oil
B) would lead to a temporary decrease in output as the AS curve would shift to the left
C) would lead to a temporary shift in the AS curve but ultimately output and inflation would return to the original long-run values
D) all of the above
E) none of the above