Use the Following to Answer Question

question 75

Multiple Choice

Use the following to answer question :
-(Figure: Short-Run and Long-Run Effects of Monetary Policy) Refer to Figure: Short-Run and Long-Run Effects of Monetary Policy.If the economy is initially at E₂ and the central bank makes no change in its monetary policy:

• A) AD₂ will shift to the right,increasing the existing inflationary gap.
• B) AD₂ will shift to the left,closing the inflationary gap.
• C) SRAS₁ will eventually shift to the left,closing the existing inflationary gap but raising the aggregate price level.
• D) SRAS₂ will immediately shift to the right,increasing the existing inflationary gap.

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Definitions:

Cognitive Delays

Developmental delays in acquiring skills such as language, reasoning, and motor coordination.

Language Delays

A developmental disorder where a child's language acquisition is significantly slower than what is typically expected for their age, affecting communication.

Concordance Rates

The probability that two individuals with shared genetics (especially twins) will both have a particular trait or disease.

Biological Cause

Underlying physiological reasons for a condition or behavior, often related to genetics or bodily functions.