Refer to the Following Figure When Answering the Following Questions

Multiple Choice

Refer to the following figure when answering the following questions.
Figure 13.5: AS/AD Model
-Consider Figure 13.5. If the Fed sets a higher inflation target, under rational expectations, the economy moves from point ________ to point ________.

A) a; c slowly
B) a; c instantly
C) a; d instantly
D) b; d slowly
E) b; c instantly