Refer to the Following Figure When Answering the Following Questions

Multiple Choice

Refer to the following figure when answering the following questions.
Figure 12.2: IS-MP Curve
-Consider Figure 12.2. If housing prices drop sharply, there is a loss in consumer and investor confidence and the economy moves from point ________. To prevent a ________, the Fed ________, and the economy moves from point ________.

A) a to d; recession; lowers interest rates; d to b
B) a to d; recession; lowers interest rates; d to c
C) c to b; bubble; raises interest rates; b to c
D) d to c; recession; lowers interest rates; c to b
E) Not enough information is given.