Suppose That an Economy's Price Adjustment Were Described by an Expectations-Augmented

Suppose that an economy's price adjustment were described by an expectations-augmented Phillips curve with expected inflation always set equal to last year's inflation. If a foreign oil shortage were to cause inflation to jump suddenly by 5 percent, then the rate of inflation

A) would climb by 5 points in one year but fall back to the original level the next, even without recession, because the price shock was temporary.
B) would jump permanently by 5 points unless a recession or some other mechanism were arranged to lower expectations.
C) would begin an unavoidable period of price acceleration.
D) would fall only in response to some sort of energy rationing.
E) none of the above.