Monetary Policy in Mokania

Multiple Choice

Monetary Policy in Mokania
Mokania has had inflation of 15% for many years. Mokania establishes a new central bank, the Bank of Mokania, with the hopes of reducing the inflation rate.

-Refer to Monetary Policy in Mokania.The Bank of Mokania publicizes its intent to reduce the inflation rate to 5%.If it is successful in doing so but people had expected inflation to fall only to 10%,then

A) unemployment rises but it would have risen by more if people had expected inflation to be 6%.
B) unemployment rises but it would have risen by less if people had expected inflation to be 6%.
C) unemployment falls but it would have fallen by more if people had expected inflation to be 6%.
D) unemployment falls but it would have fallen by less if people had expected inflation to be 6%.