The Multiplier Represents the Ratio of the Total Shift in Aggregate

question 37

Multiple Choice

The multiplier represents the ratio of the total shift in aggregate demand to the

• A) total shift in short-run aggregate supply.
• B) initial shift in short-run aggregate supply.
• C) initial shift in aggregate demand.
• D) total shift in long-run aggregate supply.

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Definitions:

Treasury Bills

Short-term U.S. government debt obligations with maturities of one year or less, considered a safe and liquid investment.

Optimal Weights

The proportion of each asset in a portfolio that maximizes its expected return for a given level of risk.

Expected Rate

Typically refers to the rate of return anticipated on an investment or project, based on projections or historical data.

Nominal Sharpe Ratio

A measure of risk-adjusted performance that indicates the average return minus the risk-free return divided by the standard deviation of return on an investment.