Question 28 (1.25 points) In the diagram below of a closed economy, which of the following can happen? Inflation (%) 10 LRAS 9 8 5 3 X 2 AD 1 AD* O 5 6 8 9 10 Unemployment (%) O Unemployment falls as the economy moves from a to b. O An increase in money supply increases both output and prices. If the economy is left alone, then as the economy moves from b to long-run equilibrium, the price level will increase. Fiscal policy is ineffective to move the economy from b to a