Economics: Today and Tomorrow © 2008

Chapter 6: Saving and Investing

Saving and Investing

1
A basic interest-earning account that requires no minimum deposit, has no set maturity and from which funds can be withdrawn at any time without penalty is called a/an_______.
A)money market deposit account
B)savings account
C)certificate of deposit
D)time deposit
2
Interest rates on certificates of deposit depend on ______.
A)minimum balance
B)length of maturity
C)number of withdrawals
D)federal insurance
3
Which of these is a savings plan that requires savers to leave their money on deposit for certain periods of time?
A)Saving
B)Interest
C)Time deposits
D)Maturity
4
Which federal agency insures deposits in credit unions?
A)Securities and Exchange Commission
B)Federal Deposit Insurance Corporation
C)Money Market Deposit Insurance Corporation
D)National Credit Union Association
5
What do Treasury bills, Treasury notes, and Treasury bonds have in common?
A)All mature in the same amount of time
B)All pay the same interest rate
C)All are exempt from federal income tax
D)All are issued by the federal government
6
Which of the following is defined as people who have invested in a corporation and own stock?
A)Stockholders
B)Capital gain
C)Savings bonds
D)Brokers
7
Which of the following is described as an increase in the value of an asset?
A)Stockholders
B)Capital gain
C)Savings bonds
D)Mutual fund
8
All of the following plans allow contribution to be tax–deferred EXCEPT______.
A)401(k) plan
B)Roth IRA
C)Keogh plan
D)IRA
9
Investing savings in several different types of accounts _____.
A)lowers the overall risk
B)increases the risk
C)is a risk-free investment
D)is only for self-employed people
10
The maximum tax-deductible amount a person earning less than $30,000 can contribute to an IRA is ____.
A)$2,000
B)$4,000
C)$6,000
D)$8,000
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