Figure: Short-Run and Long-Run Effects of Monetary Policy Refer

question 165

Multiple Choice

Figure: Short-Run and Long-Run Effects of Monetary Policy Refer to Figure: Short-Run and Long-Run Effects of Monetary Policy. If the economy is initially at E₂ and the central bank makes no change in its monetary policy:

• A) AD₂ will shift to the right, increasing the existing inflationary gap.
• B) AD₂ will shift to the left, closing the inflationary gap.
• C) SRAS₁ will eventually shift to the left, closing the existing inflationary gap but raising the aggregate price level.
• D) SRAS₂ will immediately shift to the right, increasing the existing inflationary gap.

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Definitions:

Entrepreneurial Culture

Describes a business environment that promotes innovation, takes calculated risks, and supports the creation and growth of new ventures.

New Ventures

Refers to newly established businesses or startups that are engaged in the process of entering a market and implementing a novel business plan.

High-Potential Ventures

Businesses or projects with strong growth prospects and the potential for significant financial returns.

Lead Entrepreneur

The primary individual responsible for the vision, strategy, and overall direction of a startup or entrepreneurial venture.