Use the Following to Answer Questions

question 260

Multiple Choice

Use the following to answer questions :
Figure: Monetary Policy I
-(Figure: Monetary Policy I) Look at the 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 may 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.

---

Definitions:

Intentional Tort

An Intentional Tort is a civil wrong resulting from an intentional act on the part of the tortfeasor (wrongdoer) that causes harm to another.

Felony

A serious crime, typically one punishable by imprisonment for more than one year or by death.

Negligence

A failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, leading to causing harm or damage.

Battery

An intentional unconsented physical contact or use of force against another person, causing harm or offense.