The Rationale for the Welfare State as a Correction of Market

question 11

Multiple Choice

The rationale for the welfare state as a correction of market outcomes has a number of elements. Please select all that apply.

• A) The state has a responsibility to meet the basic needs of all citizens as social rights
• B) Individuals face risks in markets which they cannot be left to bear on their own
• C) Individuals are not always the best judges of their own welfare and vulnerable to being taken advantage of in markets
• D) Public service ideally embodies superior ethics of care and community

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Definitions:

Risky Asset

An asset that carries a higher degree of risk of loss, but also offers a higher potential return.

Risk-free Asset

An investment with zero risk of financial loss, theoretically providing guaranteed returns, such as government bonds.

Portfolio Betas

Measures the volatility, or systemic risk, of a portfolio of investments relative to the overall market, indicating its sensitivity to market movements.

Greater Than 1.0

This term typically implies a value that exceeds one in magnitude, often used in financial ratios indicating a positive performance or ratio above one.