SCENARIO 3-11

question 47

Multiple Choice

SCENARIO 3-11
Given below are the closing prices for the Dow Jones Industrial Average (DJIA) and the Standard & Poor's (S&P) 500 Index over 10-weeks sometime in the past.

-Referring to Scenario 3-11,you will expect an increase in the DJIA to be associated with

• A)an increase in the S&P 500 index
• B)a decrease in the S&P 500 index
• C)no predictable change in the DJIA
• D)no predictable change in the S&P 500 index

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Definitions:

Long-run Supply Function

A relationship that shows how the quantity supplied of a good changes over time as all production factors and costs can be varied.

Rental Apartments

Housing units that are leased to tenants for a set period of time as defined in a rental agreement.

Inverse Demand Function

A mathematical representation showing how the price of an item needs to adjust to achieve a certain level of demand; it's the reverse of the demand function.

Inverse Supply

The inverse supply curve represents the relationship between the price of a good and the quantity supplied, plotted with price on the vertical axis and quantity on the horizontal.