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:

Fraction

A numerical quantity that is not a whole number, represents a part of a whole, typically written with a numerator and a denominator separated by a slash.

Consumers

Individuals or households that use goods and services generated within the economy.

Import Quota

A restriction set by the government on the amount or cost of products allowed to be brought into a country from abroad.

Tariff

A tax imposed by a government on goods and services imported from other countries.