Use the Following to Answer Questions

question 118

Multiple Choice

Use the following to answer questions :
Figure: AD-AS
-(Figure: AD-AS) Refer to the figure AD-AS. If our economy is at equilibrium with low-level inflation and the Fed uses expansionary monetary policy, the initial effect is that _____ will shift to _____ and the economy will move from _____.

• A)AD₁; AD₂; E₁ to E₂
• B)SRAS₁; SRAS₂; E₂ to E₃
• C)SRAS₂; SRAS₁; E₃ to E₂
• D)AD₂; AD₁; E₂ to E₁

---

Definitions:

Intertidal Zone

The coastal area that is exposed to the air at low tide and submerged at high tide.

High Tide

High tide is the state of the tide when the water reaches its highest level.

Low Tide

The state of the tide when at its lowest level, typically occurring twice a day, which exposes areas of the seabed that are submerged at high tide.

Thermocline

A layer in a body of water or the atmosphere where temperature changes more rapidly with depth than it does in the layers above or below.