Refer to the Graph

Multiple Choice

Refer to the graph. Assume that the economy is initially at equilibrium at point C and that the government has adopted a hands-off policy approach. If demand-pull inflation occurs, then the final
Long-run equilibrium point will be point __; while if cost-push inflation occurs (starting at point C) , then the final long-run equilibrium point will be point __.

A) A; C
B) D; B
C) A; A
D) D; A