Figure 15-2 -Refer to the Figure 15-2.Which of the Following Can Happen

Multiple Choice

Figure 15-2

-Refer to the Figure 15-2.Which of the following can happen in a closed economy?

A) Unemployment falls as the economy moves from a to b.
B) Fiscal policy is ineffective to move the economy from b to a.
C) If the economy is left alone, then as the economy moves from b to long-run equilibrium, the price level will increase.
D) An increase in money supply increases both output and prices.