An Expansionary Monetary Policy Is Most Likely to Produce an Inflationary

Multiple Choice

An expansionary monetary policy is most likely to produce an inflationary effect with little impact on output when the economy

A) is near full employment and the aggregate supply curve is horizontal.
B) is near full employment and the aggregate supply curve is vertical.
C) has substantial unemployment and the aggregate supply curve is vertical.
D) has substantial unemployment and the aggregate supply curve is horizontal.