To Accommodate an Adverse Inflation Shock the Fed Must ____

To accommodate an adverse inflation shock the Fed must ____, while to offset the effect of an increase in aggregate demand the Fed must _____.

A) lower the inflation rate target; adjust the real interest rate target to the level at which saving equals investment in the long run.
B) raise the inflation rate target; adjust the real interest rate target to the level at which saving equals investment in the long run.
C) maintain the inflation rate target; maintain the real interest rate target.
D) adjust the real interest rate target to the level at which saving equals investment in the long run; lower the inflation rate target.