When a Permanent Negative Supply Shock Hits the Economy,a Permanently

Multiple Choice

When a permanent negative supply shock hits the economy,a permanently ________.

A) lower equilibrium level of output ensues if the central bank raises interest rates
B) lower equilibrium level of output ensues if the central bank does not respond
C) higher equilibrium level of inflation ensues if the central bank does not respond
D) all of the above
E) none of the above