Given the Historical Information in the Chapter, Which of the Following

question 55

Multiple Choice

Given the historical information in the chapter, which of the following investment classes had the highest average return?

• A) Intermediate-Term Government Bonds
• B) Long-Term Government Bonds
• C) Large U.S. Stocks
• D) Small U.S. Stocks

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Definitions:

Competitive Market Economy

An economic system where numerous buyers and sellers interact in the marketplace, with competition determining the price and quantity of goods and services.

Self-interest

The pursuit of personal gain or advantage, whether economic, psychological, or physical.

Command System

A method of organizing an economy in which property resources are publicly owned and government uses central economic planning to direct and coordinate economic activities; socialism; communism. Compare with market system.

Central Planning

An economic system where the government or a central authority makes all decisions about the production and allocation of goods and services.