Refer to the graph shown. Suppose an economy begins at point B but then adopts a contractionary monetary policy. In the long run, this policy would most likely:
A)raise inflation to 9 percent but leave unemployment at 5.5 percent.
B)lower inflation to 3 percent but leave unemployment at 5.5 percent.
C)raise inflation to 9 percent but lower unemployment to 4 percent.
D)lower inflation to 3 percent but raise unemployment to 7.5 percent.

Question

Refer to the graph shown. Suppose an economy begins at point B but then adopts a contractionary monetary policy. In the long run, this policy would most likely: 
A)raise inflation to 9 percent but leave unemployment at 5.5 percent. 
B)lower inflation to 3 percent but leave unemployment at 5.5 percent. 
C)raise inflation to 9 percent but lower unemployment to 4 percent. 
D)lower inflation to 3 percent but raise unemployment to 7.5 percent.

Quizplus · Accepted Answer

The Answer of Refer to the graph shown. Suppose an economy begins at point B but then adopts a contractionary monetary policy. In the long run, this policy would most likely: 
A)raise inflation to 9 percent but leave unemployment at 5.5 percent. 
B)lower inflation to 3 percent but leave unemployment at 5.5 percent. 
C)raise inflation to 9 percent but lower unemployment to 4 percent. 
D)lower inflation to 3 percent but raise unemployment to 7.5 percent.

Refer to the Graph Shown