Figure 11-4

question 77

Multiple Choice

Figure 11-4
-Refer to Figure 11-4. If a nonintervention policy were adopted in Panel (a) ,

• A) the aggregate demand curve would have eventually shifted as shown.
• B) the short-run aggregate supply curve would have eventually shifted to the left and restored full employment.
• C) the short-run aggregate supply curve would have eventually shifted to the right and restored full employment.
• D) both the aggregate demand curve and the short-run aggregate supply curve would have eventually shifted to the left.

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Definitions:

Market Anomaly

A situation where a financial market behaves in a way that contradicts the efficient market hypothesis, often leading to potential investment opportunities.

Efficient Market Hypothesis

The theory that it is impossible to "beat the market" because stock market efficiency causes existing share prices to always incorporate and reflect all relevant information.

Weakly Efficient

A term referring to a form of market efficiency where all past trading information is fully reflected in stock prices, but future and private information may not be.

Mutual Funds

Investment programs funded by shareholders that trade in diversified holdings and are professionally managed, allowing investors access to a broad spectrum of investments.