Figure: Negative Supply Shock Reference: Ref 16-4 (Figure: Negative

Multiple Choice

Figure: Negative Supply Shock Reference: Ref 16-4 (Figure: Negative Supply Shock) This economy initially begins at Point A and a negative supply shock takes it to Point Y. Taking the economy back to the Solow growth curve would require.

A) a monetary expansion of 21 percent
B) an inflation rate much greater than 16 percent.
C) an inflation rate of 16 percent.
D) an unemployment rate of-2 percent.