The diagram shows the short-run Phillips curves SRPC1 and SRPC2 together with the long-run Phillips curve for an economy, in which NRU is the natural rate of unemployment. At the start, the economy is in equilibrium with no inflation. When the government uses a fiscal stimulus to cut unemployment, monetarists predict that there will be a sequence of movements before long-run equilibrium is restored. Which set of movements shows this prediction?
- AJ to K to L
- BL to K to J
- CM to K to J
- DM to K to L