Compared to the 1910-1960 Period, Economic Fluctuations During the Past

question 147

Multiple Choice

Compared to the 1910-1960 period, economic fluctuations during the past 50 years have been less severe.  Most economists believe that this increased stability is primarily the result of

• A) more stable monetary policy.
• B) the smaller budget deficits of recent decades.
• C) regulations that promoted more affordable housing.
• D) greater stability of stock prices as measured by the Dow Jones Industrial Average.

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Definitions:

Economic States

Economic States refer to the conditions or phases of an economy at a given time, which can include growth, recession, depression, and recovery.

Cyclical Stock

A stock whose price is affected by macroeconomic changes in the overall economy, often correlated with economic cycles of expansion and recession.

Expected Return

The anticipated return on an investment, calculated as a weighted-average of all possible returns, based on their probabilities.

Expected Return

The anticipated percentage return on an investment, accounting for all possible outcomes and their probabilities.