It Is Difficult for Policy Makers to Adopt an Expansionary

Multiple Choice

It is difficult for policy makers to adopt an expansionary policy as a response to a recession caused by a negative supply shock because an:

A) expansionary policy leads to an increase in aggregate demand, which causes aggregate output to increase, causing inflation to rise.
B) expansionary policy results in a shift of the aggregate demand curve to the left, as a result of which real output decreases.
C) expansionary policy leads to an increase in aggregate demand, as a result of which the price level decreases.
D) expansionary policy results in a shift of the long-run aggregate supply curve to the left, as a result of which the price level decreases.
E) expansionary policy results in a shift of the long-run aggregate supply curve to the right, as a result of which the price level decreases.