Which of the Following Is True of the Increase in the Wealth

question 22

Multiple Choice

Which of the following is true of the increase in the wealth of households during 2001 to 2007?

• A)The average household benefitted more from these gains than the rich.
• B)The increase in median wealth was much greater than the increase in mean wealth.
• C)The gains were a result of the housing bubble.
• D)The gains were the result of increases in stock prices.

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Definitions:

Maturity

The date on which the principal amount of a loan, bond, or other financial instrument becomes due and is repaid to the investor.

Interest Rate

The cost of borrowing money or the return earned on an investment, usually expressed as a percentage of the principal.

Equity Financing

The method of raising capital through the sale of shares in a company, which gives shareholders ownership rights.

Shareholders

Individuals or entities that own shares in a corporation, giving them a part of the ownership of the company and potentially a claim on part of its assets and earnings.