When the economy suffers a permanent negative supply shock and the central bank does not respond by changing the autonomous component of monetary policy,then
A)inflation will be higher.
B)output will be at its potential.
C)output will be unchanged.
D)inflation will be unchanged.
E)both A and B.

Question

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The Answer of When the economy suffers a permanent negative supply shock and the central bank does not respond by changing the autonomous component of monetary policy,then
A)inflation will be higher.
B)output will be at its potential.
C)output will be unchanged.
D)inflation will be unchanged.
E)both A and B.

When the Economy Suffers a Permanent Negative Supply Shock and the Central