When a Permanent Negative Supply Shock Hits the Economy ________

Multiple Choice

When a permanent negative supply shock hits the economy ________.

A) in the long-run,the output gap returns to zero only if the central bank raises interest rates
B) the long-run equilibrium level of output depends on whether and how the central bank responds
C) there is no permanent effect on inflation if the central bank raises interest rates
D) all of the above
E) none of the above