-In the Above Figure, Starting at E3, If There Is

question 274

Multiple Choice

-In the above figure, starting at E3, if there is an increase in technology that causes a permanent increase in production capabilities

• A) aggregate supply would shift to SRAS0 and LRAS1 would shift to LRAS0.
• B) aggregate supply would shift to SRAS1 and LRAS0 would shift to LRAS1.
• C) aggregate supply would shift to SRAS2 and LRAS0 would shift to LRAS1.
• D) aggregate supply would shift to SRAS1 and then return to SRAS0.

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Definitions:

Security Price

The security price is the current market value at which a particular security (like stocks, bonds) can be bought or sold in the financial markets.

Abnormal Return

The difference between the actual return of a security and the expected return predicted by an equilibrium model.

Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings.

Fundamental Analysts

Experts who evaluate investments by analyzing the fundamental financial conditions and performance of businesses and markets.