During a Demand-Pull Inflation, If the Fed Tries to Maintain

question 311

Multiple Choice

During a demand-pull inflation, if the Fed tries to maintain a level of real GDP above potential GDP,

• A) the SAS curve will shift leftward continuously and the AD curve will not shift.
• B) the AD curve will shift rightward continuously and SAS curves will shift leftward continuously.
• C) the AD curve will shift rightward continuously and the SAS curve will not shift.
• D) there will be a one-time shift in the AD and the SAS curves.

---

Definitions:

Arousal

A physiological and psychological state of being awake or reactive to stimuli, often associated with increased heart rate, alertness, and readiness to respond.

Narcissism

A personality trait characterized by an inflated sense of self-importance, a need for excessive attention and admiration, and a lack of empathy for others.

Distraction

The process of diverting attention away from the intended object of focus towards something else, often leading to a decrease in performance or comprehension.

Deindividuation

A tendency to lose one’s sense of individuality when in a group or crowd.