In the context of long-run economic adjustment, which of the following scenarios best illustrates the process by which capital accumulation can lead to price level adjustments under an inflation targeting regime?

In a long-run economic adjustment, capital accumulation refers to the process where businesses invest in physical assets like machinery or buildings to increase production. When more capital is available, it can lead to higher productivity, which means that companies can produce more goods at lower costs. For example, if a factory invests in new technology, it can produce twice as many toys without doubling its expenses. As production increases and costs decrease, the supply of goods in the market rises, which can help lower prices, especially if the central bank is targeting a specific inflation rate. This adjustment process helps stabilize the economy by ensuring that prices remain in line with the central bank's goals, even as more capital is accumulated.