Suppose the Federal Reserve Pursues Contractionary Monetary Policy

Multiple Choice

Suppose the Federal Reserve pursues contractionary monetary policy. In the long run

A) both inflation and the unemployment rate are higher than they were prior to the change in policy.
B) inflation is higher and the unemployment rate is the same as it was prior to the change in policy.
C) inflation is lower and the unemployment rate is lower than it was prior to the change in policy.
D) inflation is lower and unemployment is the same as it was prior to the change in policy.