Which of the Following Explains Contractionary Monetary Policy in the Long

question 53

Multiple Choice

Which of the following explains contractionary monetary policy in the long run?

• A) Contractionary monetary policy shifts aggregate demand to the left,moving the economy from long-run equilibrium to a short-run equilibrium with a lower price level and a lower level of real gross domestic product (GDP).In the long run,as resource prices fall,the short-run aggregate supply curve shifts to the right,bringing the economy back to a long-run equilibrium,where no real changes to GDP have occurred.
• B) Contractionary monetary policy shifts aggregate demand to the right,moving the economy from long-run equilibrium to a short-run equilibrium with a higher price level and a higher level of real gross domestic product (GDP).In the long run,as resource prices rise,the aggregate demand curve shifts back to the left,bringing the economy back to a long-run equilibrium,where no real changes to GDP have occurred.
• C) Contractionary monetary policy shifts aggregate demand to the right,moving the economy from long-run equilibrium to a short-run equilibrium with a higher price level and a higher level of real gross domestic product (GDP).In the long run,as resource prices rise,the short-run aggregate supply curve shifts to the left,bringing the economy back to a long-run equilibrium,where no real changes to GDP have occurred.
• D) Contractionary monetary policy shifts aggregate demand to the right,moving the economy from long-run equilibrium to a short-run equilibrium with a higher price level and a higher level of real gross domestic product (GDP).In the long run,as resource prices fall,the short-run aggregate supply curve shifts to the right as well,causing the economy to expand.
• E) Contractionary monetary policy shifts aggregate demand to the left,moving the economy from long-run equilibrium to a short-run equilibrium with a lower price level and a lower level of real gross domestic product (GDP).In the long run,as resource prices rise,the short-run aggregate supply curve shifts to the left,causing the economy to contract.

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Definitions:

Visual Cortex

The region of the brain responsible for processing visual information.

Experience-expectant Development

A process by which the brain develops and modifies itself through ordinary experiences, such as sensory stimulation and movement, which are expected in the environment.

Congenital Cataract

A vision impairment present at birth where the lens of the eye is cloudy or opaque, affecting clarity of vision.

Depth Perception

The ability to perceive the distance of objects from each other and from ourselves.