Milton Friedman and Adam Smith Both Argued That __________

question 38

Multiple Choice

Milton Friedman and Adam Smith both argued that __________.

• A)markets function best when left alone
• B)markets require regulation to function properly
• C)a progressive tax system promotes freedom and equality
• D)the minimum wage is needed to equalize the power of owners and workers

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Definitions:

Regression Equation

An equation that describes the relationship between a dependent variable and one or more independent variables.

CAPM

The Capital Asset Pricing Model, a formula used to determine the expected return on an investment, factoring in risk and the time value of money.

Nonsystematic Variance

Nonsystematic variance, also known as unsystematic risk, is the portion of an investment's risk that is attributable to the specific risk of its issuer and can be mitigated through diversification.

Security Market Line

A graphical representation of the capital asset pricing model, showing the expected return of an investment as a function of its systemic risk.