During the Last Two Centuries, After Adjustment for Inflation

question 184

Multiple Choice

During the last two centuries, after adjustment for inflation,

• A) corporate bonds have yielded a real return of approximately 7 percent annually, compared to a real return of about 3 percent for corporate stocks.
• B) corporate stocks have yielded a real return of approximately 7 percent annually, compared to a real return of about 3 percent for bonds.
• C) both corporate stocks and bonds have yielded a real rate of return of about 3 percent.
• D) both corporate stocks and bonds have yielded a real rate of return of about 7 percent.

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Definitions:

Drive-Reduction

A theory of motivation that posits that behavior is driven by the need to reduce internal states of tension caused by unmet biological needs.

Incentive

A factor that motivates or encourages someone to do something, often linked to rewards or punishments.

Optimal Level

Pertains to the most favorable or advantageous level or stage of a process, activity, or variable.

Drive Reduction

A theory in psychology suggesting that motivation arises from the desire to reduce internal tension caused by unmet biological needs, such as hunger or thirst.