Everything Else Held Constant,an Increase in Financial Frictions ________ Aggregate

question 97

Multiple Choice

Everything else held constant,an increase in financial frictions ________ aggregate ________.

• A)increases;demand
• B)decreases;demand
• C)decreases;supply
• D)increases;supply

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Definitions:

VaR (Value At Risk)

A statistical technique used to measure and quantify the level of financial risk within a firm or investment portfolio over a specific time frame.

Returns

The profit or loss generated on an investment over a specific period, usually expressed as a percentage.

Sharpe Measure

A ratio used to evaluate the risk-adjusted return of an investment, calculated by subtracting the risk-free rate from the return of the investment and dividing by the investment's standard deviation.

Excess Returns

Returns on an investment that exceed the benchmark or risk-free return, often used as a measure of the performance of investment managers.