Figure 22-7
Use this graph to answer the questions below.
-Refer to figure 22-7. If the economy starts at 5% unemployment and 5% inflation then if the Federal Reserve pursues a contractionary monetary policy, in the short run the economy moves to
A)3% unemployment and 5% inflation. In the long run the economy moves to 5% unemployment and 5% inflation.
B)3% unemployment and 5% inflation. In the long run the economy moves to 5% unemployment and 3% inflation.
C)7% unemployment and 3% inflation. In the long run the economy moves to 5% unemployment and 5% inflation.
D)7% unemployment and 3% inflation. In the long run the economy moves to 5% unemployment and 3% inflation.

Question

Figure 22-7
Use this graph to answer the questions below. 
-Refer to figure 22-7. If the economy starts at 5% unemployment and 5% inflation then if the Federal Reserve pursues a contractionary monetary policy, in the short run the economy moves to
A)3% unemployment and 5% inflation. In the long run the economy moves to 5% unemployment and 5% inflation. 
B)3% unemployment and 5% inflation. In the long run the economy moves to 5% unemployment and 3% inflation. 
C)7% unemployment and 3% inflation. In the long run the economy moves to 5% unemployment and 5% inflation. 
D)7% unemployment and 3% inflation. In the long run the economy moves to 5% unemployment and 3% inflation.

Quizplus · Accepted Answer

The Answer of Figure 22-7
Use this graph to answer the questions below. 
-Refer to figure 22-7. If the economy starts at 5% unemployment and 5% inflation then if the Federal Reserve pursues a contractionary monetary policy, in the short run the economy moves to
A)3% unemployment and 5% inflation. In the long run the economy moves to 5% unemployment and 5% inflation. 
B)3% unemployment and 5% inflation. In the long run the economy moves to 5% unemployment and 3% inflation. 
C)7% unemployment and 3% inflation. In the long run the economy moves to 5% unemployment and 5% inflation. 
D)7% unemployment and 3% inflation. In the long run the economy moves to 5% unemployment and 3% inflation.

Figure 22-7 Use This Graph to Answer the Questions Below