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Gerald, a Recent Graduate of a Community College, Is About

question 268

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Gerald, a recent graduate of a community college, is about to make his first investment in the stock market. Which of the following would be a cautious way for Gerald to start investing?


Definitions:

Social Optimum

The most efficient allocation of resources, resulting in the maximization of social welfare and benefiting all members of a society.

Corrective Tax

Levies imposed to address and ameliorate the negative externalities generated by certain economic activities, thereby realigning social and private costs.

Subsidy

A financial contribution granted by the government or a public body to support businesses, reduce the price of commodities, or encourage activities beneficial to the public interest.

Equilibrium Number

When market demand equals supply, leading to stability in prices.

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