The Federal Reserve operates under a rule that requires money supply growth to increase by one percentage point for every percentage point that unemployment rises above its natural rate

If the costs of production increase, there is

A) a decrease in aggregate supply and the AS curve shifts rightward. B) a decrease in the quantity of real GDP supplied and a movement down along the AS curve. C) a decrease in aggregate supply and the AS curve shifts leftward. D) an increase in the quantity of real GDP supplied and a movement up along the AS curve. E) an increase in aggregate supply and the AS curve shifts rightward.

The long-run average cost curve shows

A) the average cost of producing where diminishing returns are not present. B) the plant size or scale that the firm should build. C) the lowest average cost of producing every level of output in the long run. D) where the most profitable level of output occurs.