Economic Efficiency Requires That

question 313

Multiple Choice

Economic efficiency requires that

• A) individuals take all actions within their power.
• B) only long-lasting, high-quality products be produced.
• C) income be distributed equally among individuals.
• D) all economic activity generating more benefits than costs to individuals in the economy be undertaken.

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Definitions:

Common Stock

A form of corporate equity ownership, representing a claim on a portion of the corporation's assets and earnings.

CAPM

The Capital Asset Pricing Model is a framework that explains the connection between the expected return on assets, especially stocks, and their systematic risk.

Characteristic Line

A line in finance that shows a security's expected returns as a function of the overall market's returns.

Market Return

The total return on investment, including capital gains and dividends, from investing in the stock market over a specific period.