The Economy's Aggregate Supply Curve Is Drawn Under Two Main

question 93

Multiple Choice

The economy's aggregate supply curve is drawn under two main assumptions.They are

• A)firms' unit costs are constant; prices of all factors of production are constant.
• B)firms' unit costs are constant; the state of technology is constant.
• C)firms will produce more output only if prices rise; technology improves only if prices rise.
• D)the prices of all factors of production are constant; the state of technology is constant.
• E)the prices of all factors of production are constant; productivity improves as the price level rises.

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Definitions:

Market Beta

A measure of a stock's volatility in relation to the overall market; indicates the stock's sensitivity to market movements.

Factor Portfolio

A portfolio constructed to have a high sensitivity to specific risk factors, aiming to capture the risk premiums associated with those factors.

Well-diversified Portfolio

An investment portfolio constructed to minimize risk by spreading investments across various asset classes.

Beta

The volatility or risk associated with a specific investment relative to the broader market.