If the Fed Decides to Tighten Monetary Policy Because the Inflation

question 85

Multiple Choice

If the Fed decides to tighten monetary policy because the inflation rate has risen to a level inconsistent with economic efficiency and long-term growth:

• A)in the short run the SRAS curve will shift downward and a recessionary gap is created.
• B)in the long run the AD curve will shift to the left and the long-run equilibrium is restored.
• C)in the short run the AD curve shifts to the left and a recessionary gap is created.
• D)in the short run the AD curve shifts to the right and a recessionary gap is created.

---

Definitions:

Opioid Pain Medication

Drugs derived from opium or synthetic analogs used to treat moderate to severe pain by acting on the nervous system.

Tolerance

A physiological state where increased amounts of a substance are required to achieve the same effect previously attained with a smaller dose.

Therapeutic Level

The concentration range of a drug in the bloodstream that maintains desired effects without causing toxicity.

Peak Action

The time at which a drug reaches its maximum concentration in the blood, resulting in the maximum intended effect.