The Net Exports Adjustments in Aggregate Demand Includes

question 148

Multiple Choice

The net exports adjustments in aggregate demand includes

• A)capital inflows minus capital outflows.
• B)capital outflows minus capital inflows.
• C)the sum of exports minus imports.
• D)the sum of imports minus exports.

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Definitions:

SML Slope

The slope of the Security Market Line, which represents the risk-return trade-off at any given time, illustrating the expected return of a security per unit of risk.

Capital Asset Pricing Model

A model used to determine the theoretical expected return on an investment, considering risk-free return, the investment's volatility, and the expected return of the market.

Beta

A measure of a stock's volatility in relation to the overall market; used in the Capital Asset Pricing Model to determine risk.

Unsystematic Risk

The risk of price change due to the unique circumstances of a specific security, as opposed to overall market movement, which can be diversified away.