If the Economy Is in a Long-Run Equilibrium When the Federal

Multiple Choice

If the economy is in a long-run equilibrium when the Federal Reserve decides that its inflation target is too low and chooses to raise it,________.

A) it would conduct monetary policy consistent with a downward shift of the MP curve
B) it would conduct monetary policy that would lead to a rightward shift of the AD curve
C) after an easing of monetary policy,an eventual decrease in short-run AS would drive the long-run equilibrium level of inflation up
D) all of the above
E) none of the above