Use the Following to Answer Questions

question 226

Multiple Choice

Use the following to answer questions
Figure: Policy Changes in the Short Run
-(Figure: Policy Changes in the Short Run) To move the economy in the short run from point b to point a,Fed policymakers implement _______ monetary policy,thereby accepting _______ to reduce ________.

• A) expansionary;more unemployment;the rate of inflation
• B) contractionary ;a higher rate of inflation;unemployment
• C) expansionary;a higher rate of inflation;unemployment
• D) contractionary;more unemployment;the rate of inflation

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Definitions:

Risk-Free Return

The theoretical rate of return of an investment with zero risk of financial loss.

Dollar-Weighted Return

A method of calculating an investment's return that takes into account the timing and size of cash flows, providing a more accurate measure of personal investment performance.

Dividend

A portion of a company's earnings that is paid to shareholders, usually on a quarterly basis, as determined by the company's board of directors.

Jensen's Measure

A performance evaluation method that calculates the excess return a fund generates over its expected return, given its level of risk as measured by beta.