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 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.