Use the Following to Answer Questions

question 86

Multiple Choice

Use the following to answer questions:
Figure: Monetary Policy I
-(Figure: Monetary Policy I) Refer to Figure: Monetary Policy I. If the economy is initially in equilibrium at E₂ and the central bank chooses to sell Treasury bills:

• A) AD₂ will shift to the right, causing an inflationary gap.
• B) AD₂ will shift to AD₁, causing a recessionary gap.
• C) SRAS₁ will shift immediately to the left, closing an inflationary gap.
• D) SRAS₂ will shift immediately to the right, increasing an inflationary gap.

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Definitions:

Physiological Processes

The natural physical and chemical activities that occur within living organisms to sustain life, including metabolism, homeostasis, and reproduction.

Chronically Ill

Describes individuals who suffer from one or more long-term and persistent diseases or conditions.

Factitious Disorder

A serious mental disorder in which someone deceives others by appearing sick, by purposely getting sick, or by self-injury, without obvious benefits like financial gain.

Munchausen Syndrome By Proxy

A factitious disorder in which parents make up or produce physical illnesses in their children.