How does the economy transition from short-run to long-run equilibrium after a contractionary policy?

• A. The natural rate of unemployment decreases, shifting the long-run Phillips curve.
• B. The natural rate of unemployment increases, shifting the long-run Phillips curve.
• C. Expected inflation decreases, shifting the short-run Phillips curve to the left.
• D. Expected inflation increases, shifting the short-run Phillips curve to the right.

Answer: (C)