FIGURE 24-2 Refer to Figure 24-2

question 84

Multiple Choice

FIGURE 24-2 Refer to Figure 24-2.If the economy is currently in a short-run equilibrium at ,the economy is experiencing

• A)potential output growth.
• B)a long-run equilibrium.
• C)an excess supply of labour.
• D)an inflationary output gap.
• E)a recessionary output gap.

---

Definitions:

Capital Market Line

A line used in the capital asset pricing model to depict the rates of return for efficient portfolios depending on the risk-free rate of return and the level of risk (standard deviation) for a particular portfolio.

Characteristic Line

In finance, a line that describes the relationship between the return on an investment and the return on the market as a whole, used in the Capital Asset Pricing Model.

Systematic Risk

Systemic risk associated with the overall market or a particular segment of the market, widely known as market risk, remains even after diversification efforts.

Unsystematic Risk

The risk of price change due to the unique circumstances of a specific security, as opposed to the overall market.