Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions
Figure: Understanding Expectation Theories
-(Figure: Understanding Expectation Theories) Assume the economy is at point c.According to the theory of rational expectations,if the Fed announces and then starts a plan to practice contractionary policy,the economy will move from point c:

A) to point a to point d.
B) to point b to point d.
C) directly to point d.
D) to point a to point b.