Refer to the Diagram for a Specific Economy

Multiple Choice

Refer to the diagram for a specific economy. Which of the following best describes a decision by policymakers that moves this economy from point b to point a?

A) Policymakers have instituted an expansionary monetary policy and/or a budgetary deficit, thereby accepting more unemployment to reduce the rate of inflation.
B) Policymakers have instituted a restrictive monetary policy and/or a budgetary surplus, thereby accepting a higher rate of inflation to reduce unemployment.
C) Policymakers have instituted an expansionary monetary policy and/or a budgetary deficit, thereby accepting a higher rate of inflation to reduce unemployment.
D) Policymakers have instituted a restrictive monetary policy and/or a budgetary surplus, thereby accepting more unemployment to reduce the rate of inflation.