Which of the Following Statements Is TRUE

question 156

Multiple Choice

Which of the following statements is TRUE?

• A) The Great Depression, despite its name, was really a small economic downturn with very little unemployment.
• B) The Great Depression refers to the severe economic downturn that occurred during the nineteenth century.
• C) The Great Depression would have been less severe if the Federal Reserve had acted appropriately.
• D) Well-functioning economies grow at a constant rate and do not experience booms and busts.

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Definitions:

Risky Asset

An asset that carries a significant chance of losing part or all of its investment value.

Expected Profit

The forecasted amount of profit or loss that is anticipated from a business venture or investment, based on calculations or assumptions.

Risky Portfolio

An investment portfolio that consists of assets with higher levels of risk, with the potential for higher returns.

Geometric Average Return

The average rate of return on an investment, calculated by multiplying n returns together and then taking the nth root.