When They Are Confronted with an Adverse Shock to Aggregate

Multiple Choice

When they are confronted with an adverse shock to aggregate supply,policymakers face a difficult choice in that

A) if they contract aggregate demand,the unemployment rate will increase further.
B) if they expand aggregate demand,the inflation rate will increase further.
C) they face a less favorable trade-off between inflation and unemployment than they did before the shock.
D) All of the above are correct.