Input choices in the present are often affected by past decisions

The two key objectives of the Fed are:

A) low and predictable levels of inflation, and interest rates above 10%. B) zero inflation, and zero unemployment. C) low and predictable levels of inflation, and maximum levels of employment. D) low and predictable levels of inflation, and zero unemployment.

If the economy in the graph shown is currently at point B, and the government enacts contractionary fiscal policy, in the short run the economy will most likely move to point:

A. A
B. It is likely to be unaffected and stay at point B
C. C
D. D