Figure 17-3 -Refer to Figure 17-3. Suppose the Economy Is at Point

Multiple Choice

Figure 17-3
-Refer to Figure 17-3. Suppose the economy is at point a. Assume that (1) the public's expectations are completely rational; (2) markets allocate resources instantaneously; and (3) the economy is at its natural level of employment. The theoretical adjustment path resulting from an increase in aggregate demand according to the rational expectations hypothesis is

A) a to c to d.
B) a to b to d.
C) a to d.
D) a to b and back to a.