Why Can't Economists Identify a Definite Time Period That Constitutes

question 58

Essay

Why can't economists identify a definite time period that constitutes the short run?

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Definitions:

Capital Asset Pricing Model

A model that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Expected Rate

The anticipated return on an investment over a certain period.

Beta

A measure of a stock's volatility in relation to the overall market, where a beta greater than 1 indicates greater volatility than the market.

Portfolio Beta

A measure of the volatility of a portfolio relative to the market as a whole.