Which of the Following Statements Best Describes the Relationship Today

question 23

Multiple Choice

Which of the following statements best describes the relationship today between government and the economy in the United States?

• A)The economy is largely self-regulating.
• B)The government subsidizes economic interests but otherwise leaves them to operate as they please.
• C)The government is the driving force in the U.S.economy; business has a secondary role.
• D)The government has an important role in regulating and maintaining the U.S.economy.
• E)The government owns most of the means of production in the United States.

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Definitions:

Market Risk

The risk of losses in investments due to factors that affect the entire market, such as economic shifts or political events.

Asset-Specific Risk

The risk associated with holding a particular asset, which can be reduced through diversification.

Security Market Line

A representation of the capital asset pricing model (CAPM), showing the relationship between the expected return of a security and its risk as measured by beta.

Expected Rate

The anticipated return on an investment in future periods based on various assumptions or models.