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Based on the Figure Below

Question 53

Multiple Choice

Based on the figure below. Starting from long-run equilibrium at point C, a favorable inflation shock that decreases inflation from π to π1 will lead to a short-run equilibrium at point ___ and eventually to a long-run equilibrium at point ____, if left to self-correcting tendencies. Based on the figure below. Starting from long-run equilibrium at point C, a favorable inflation shock that decreases inflation from π<sub> </sub>to π<sup>1</sup> will lead to a short-run equilibrium at point ___ and eventually to a long-run equilibrium at point ____, if left to self-correcting tendencies. A) A; B B) A; C C) B; A D) B; C


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

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