In the Long Run, If Aggregate Demand Increases

question 66

Multiple Choice

In the long run, if aggregate demand increases,

• A)output increases while prices fall.
• B)only prices fall.
• C)only prices rise.
• D)both output and prices fall.

Analyze the effects of changes in market conditions (such as changes in market rate of return and risk premium) on the expected return of securities.

Calculate portfolio beta and understand how to adjust a portfolio to achieve a desired beta.

Understand and calculate the variance and standard deviation of returns for both individual securities and portfolios.

Evaluate the pricing of securities (overpriced or underpriced) based on their expected return versus their actual return.

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