When conducting expansionary monetary policy, central banks are mindful that: Multiple Choice there is a conflict between keeping inflation low and economic activity high. unemployment can be lowered in the long-run but at the cost of higher prices in the short run. unemployment can be lowered but at the cost of higher prices in the short-run. potential output can be increased in the long run but at the cost of higher inflation. spending on interest-sensitive consumption goods will likely not be significantly affected