Refer to the Graph Shown

Multiple Choice

Refer to the graph shown. Suppose an economy begins at point B but then adopts a contractionary monetary policy. In the short run, this policy would most likely:

A) reduce inflation to 3 percent and raise unemployment to 7.5 percent.
B) reduce inflation to 3 percent and reduce unemployment to 4 percent.
C) raise inflation to 9 percent and raise unemployment to 7.5 percent.
D) raise inflation to 9 percent and reduce unemployment to 4 percent.