Consider Panel B of Figure 21.16, where the short-run equilibrium occurs at an output level below potential

Question:

Consider Panel B of Figure 21.16, where the short-run equilibrium occurs at an output level below potential output, Yp. Suppose that the initial inflation target is at point 2, but the central bank chooses to stimulate demand to speed the adjustment to long-run equilibrium. What are the costs and benefits of such a policy?