On Average,for the Period 1926 Through 2017

question 29

Multiple Choice

On average,for the period 1926 through 2017:

• A)the real rate of return on U.S.Treasury bills has been negative.
• B)small-company stocks have underperformed large-company stocks.
• C)long-term government bonds have produced higher returns than long-term corporate bonds.
• D)the excess return on long-term corporate bonds has exceeded the excess return on long-term government bonds.
• E)the excess return on large-company stocks has exceeded the excess return on small-company stocks.

---

Definitions:

Opportunity Costs

The loss of potential gain from other alternatives when one alternative is chosen, representing the benefits one misses out on when making a decision.

Excess Capacity

Excess capacity refers to a situation where a company is operating below its maximum output level, indicating that it can produce more with the current resources if there is higher demand.

Expansionary Fiscal Policy

To fight recessions, the federal government lowers taxes and/or raises spending.

Government Spending

Expenditures made by the government of a country on collective needs and wants such as infrastructure, public safety, education, and healthcare.