-Refer to the Graphs in the Exhibit

question 27

Multiple Choice

-Refer to the graphs in the exhibit.In period 2, which of the following would cause the aggregate supply curve to shift from AS to AS'?  

• A) an increase in resource prices, improved technology, or an extension of patent protection
• B) a decrease in resource prices, improved technology, or an extension of patent protection
• C) an appreciation of the dollar, higher inflation in Europe, or a decrease in resource prices
• D) a depreciation of the dollar, higher inflation in Asia, or improved technology

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, typically with dividends that are paid out before those of common stocks.

CAPM

The Capital Asset Pricing Model, a theory that describes the relationship between systematic risk and expected return for assets, particularly stocks.

Dividend Growth

The rate at which a company's dividend payments increase over time.

Retained Earnings

The portion of a company's profit that is held or retained and saved for future use, reinvestment in the business, or to pay debt, rather than distributed to shareholders as dividends.