The Government of Murkland Considers Two Policies

Multiple Choice

The government of Murkland considers two policies. Policy A would shift AD right by 300 units while policy B would shift AD right by 200 units. According to the short-run Phillips curve, policy A will lead

A) to a lower unemployment rate and a lower inflation rate than policy B.
B) to a lower unemployment rate and a higher inflation rate than policy B.
C) to a higher unemployment rate and lower inflation rate than policy B.
D) to a higher unemployment rate and higher inflation rate than policy B.