One Part of the "Informal Defence" of the Market System

question 97

Multiple Choice

One part of the "informal defence" of the market system is the argument,made forcefully by the late Milton Friedman,that free markets provide for the

• A)greatest security for members of society.
• B)decentralization of economic power.
• C)greatest equality in income distribution.
• D)greatest scope for international trade.
• E)government with the highest tax revenues.

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Definitions:

Risk-Adjusted Returns

Performance measurement that evaluates the return gained from an investment relative to the risk taken, often calculated using measures such as the Sharpe ratio.

Small Firms

Companies with a relatively small market capitalization.

Large Firms

Corporations or companies that have a significant market capitalization, extensive operations, and a widespread influence in their industries.

Market Efficiency

A concept stating that all available information is already reflected in asset prices, making it impossible to consistently achieve higher returns without assuming additional risk.