Human beings have two types of memory - short term memory, which allows as to remember a small number of things that just happened, and long term memory that allows as to remember things that we learned or experienced a long time ago. A high blood alcohol level interferes with long-term memory encoding and retrieval in the brain. So, when you are very drunk, you can appear functional because you can still make decisions based on things that just happened (short-term memory), but later on, you won't be able to remember much that happened, since your brain couldn't create long-term memories properly.
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