Figure 35-8 Use This Graph to Answer the Questions Below

Multiple Choice

Figure 35-8
Use this graph to answer the questions below.
-Refer to figure 35-8.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 contractionary 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