Suppose a Recession in Europe Reduces U

Multiple Choice

Suppose a recession in Europe reduces U.S. net exports at every price level. Which of the following would you expect to occur in the U.S. as a result of this change?

A) In the short run, unemployment will increase and inflation will fall.
B) In the short run, unemployment will increase and inflation will rise.
C) In the short run, unemployment will decrease and inflation will rise.
D) In the short run, unemployment will decrease and inflation will fall.