The Figure Given Below Represents the Short Run and Long

Multiple Choice

The figure given below represents the short run and long run Phillips curve.
Figure 14.4

-Refer to Figure 14.4. If the adaptive expectations hypothesis holds, and the economy moves from point C to point D because of expansionary fiscal policy, what rate of inflation are people expecting at point D?

A) 2 percent
B) 4 percent
C) 6 percent
D) 8 percent
E) 10 percent