The Larger the Multiplier, the ________ the AE Curve and the ________

question 110

Multiple Choice

The larger the multiplier, the ________ the AE curve and the ________ the AD curve from a given increase in investment.

• A)steeper; greater the rightward shift of
• B)steeper; greater the movement upward along
• C)flatter; greater the rightward shift of
• D)flatter; greater the movement upward along
• E)steeper; greater the movement downward along

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Definitions:

Capital Allocation Line

A line representing the risk-return trade-off of different portfolios, showing the highest expected return for a given level of risk.

Standard Deviation

A measure of the dispersion or variation in a set of values, indicating how much the values differ from the mean of the set.

Complete Portfolio

A portfolio that includes both risky assets and a risk-free asset, optimizing the balance between risk and return.