Which Statement Accurately Describes Capitalism

question 1

Multiple Choice

Which statement accurately describes capitalism?

• A)Industrial capitalism is characterized by pools,trusts,holding companies and an interpenetration of banking,insurance and industrial interests.
• B)Mercantile capitalism emerged in the United States in the period directly following the civil war.
• C)In state welfare capitalism the government plays an active role in regulating economic activities in an effort to smooth out the boom-and-bust pattern of the business cycle.
• D)Financial capitalism developed in the period immediately prior to the Renaissance.

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Definitions:

Interest Rates

This represents the cost, in percentage terms of the principal, that a borrower incurs from a lender to utilize their assets.

Maturity Risk

The risk of loss to an investor from changes in the price of a bond that arise from changes in the market interest rate. Also called price risk and interest rate risk. The term maturity risk emphasizes the fact that interest-induced price changes are larger with longer maturities.

Bond Prices

The market price for which a bond is bought or sold, influenced by interest rates, credit quality, and other factors.

Interest Rate Movements

Fluctuations in the interest rate over time which can affect borrowing costs and investment returns.