Exhibit 8-4 -Refer to Exhibit 8-4.A Movement from Point a to Point

question 202

Multiple Choice

Exhibit 8-4
-Refer to Exhibit 8-4.A movement from point A to point B on SRAS₁ would have been the result of

• A) a decrease in the price level.
• B) an increase in the price level.
• C) an adverse supply shock.
• D) a beneficial supply shock.

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Definitions:

Standard Deviation

A measure of the dispersion of returns for a given security or market index, indicating the degree of volatility.

Passive Investment Strategies

Investment strategies that involve minimal buying and selling, often mirroring an index.

Active Trading Strategies

Investment strategies that involve frequent transactions, aiming to exploit short-term price movements to achieve profit.

CAL

Stands for Capital Allocation Line, which represents the risk-reward profile of various portfolios, showing the possible rates of return for a given level of risk.