If You Invest $4,000 Per Year Over the Next 40

question 15

Multiple Choice

If you invest $4,000 per year over the next 40 years for retirement, which of the following is correct?

• A) A low rate of return will give you the highest total dollar return.
• B) A high rate of return will give you the highest total dollar return.
• C) The rate of return doesn't matter; your total dollar return will be the same with any investment.
• D) The length of time your money is invested does not make a difference.
• E) Your investment will be worth $160,000 at retirement.

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Definitions:

Compensating Differentials

Wage differences across jobs that reflect the desirability of the job attributes, compensating workers for job inconveniences or hazards.

Distributional Justice

The ethical principle concerned with the fair allocation of goods, wealth, or resources among individuals in a society.

John Rawls

An American philosopher known for his theory of justice and contributions to political and moral philosophy.

Income Redistribution

The reallocation of income from certain individuals to others by means of a social mechanism such as taxation, charity, welfare, public services, land reforms, or monetary policies.