If Policy-Makers Attempt to Offset an Upward Inflation Shock with Monetary

Multiple Choice

If policy-makers attempt to offset an upward inflation shock with monetary _________,the resulting long-run equilibrium will be at _________ inflation rate compared to allowing the self-correcting mechanism to return the economy to potential output.

A) "tightening";a higher
B) "tightening";a lower
C) "easing";a higher
D) "easing";a lower
E) "easing";the same