Figure 22-7 Use This Graph to Answer the Questions Below

Multiple Choice

Figure 22-7
Use this graph to answer the questions below.
-Refer to figure 22-7. Suppose the economy starts at 5% unemployment and 3% inflation and expected inflation remains at 3%. Which one of the following points could the economy move to in the short run if the Federal Reserve pursues a more expansionary monetary policy?

A) 7% unemployment and 1% inflation
B) 7% unemployment and 3% inflation
C) 3% unemployment and 5% inflation
D) 3% unemployment and 7% inflation