The current international financial system is a managed float system

Look at the above figure. Suppose the economy was initially in equilibrium at point A. What point would represent the short-run equilibrium if the Fed makes an open market purchase of bonds?

A) A B) B C) C D) D

In goods markets ________ and in factor markets ________

A) households sell to firms; firms sell to households B) firms sell to households; households sell to firms C) households sell to firms; households sell to firms D) firms sell to households; firms sell to households