Economics Chapter 6

Question 1

certificate issued by a company or the government in exchange for borrowed money

Answer 1

bond

Question 2

increase in the value of an asset from the time it was bought to the time it was sold

Answer 2

capital gain

Question 3

time deposits that state the amount of the deposit, maturity, and the interest being paid

Answer 3

certificates of deposit

Question 4

a person who acts as a go-between for the buyers and sellers of stocks and bonds

Answer 4

broker

Question 5

decrease in the value of an asset from the time it was bought to the time it was sold

Answer 5

capital loss

Question 6

spreading investments into several types of accounts to lower overall risk

Answer 6

diversification

Question 7

money return a stockholder receives on the amount originally invested in the company by purchasing stock

Answer 7

dividends

Question 8

payment people receive when they lend money, allowing someone to use their money

Answer 8

interest

Question 9

period of time at which time deposits will pay a stated rate of interest

Answer 9

maturity

Question 10

account that pays relatively high rates of interest, requires a minimum balance and allows immediate access to money

Answer 10

money market deposit account

Question 11

private retirement account that allows individuals or married couples to save a certain amount of their earning per year

Answer 11

individual retirement account (IRA)

Question 12

retirement plan that allows the self-employed to save up to 15% of their annual income and deduct it from their income

Answer 12

Keogh Plan

Question 13

type of mutual fund that uses investors’ money to make short term loans businesses and banks

Answer 13

money market fund

Question 14

investment company that pools the money of many people to buy investments

Answer 14

mutual fund

Question 15

nonuse of income for a certain period of time for later use

Answer 15

saving

Question 16

share in ownership of the corporation issuing stock

Answer 16

stock

Question 17

bonds sold by local and state govts. the interest on which is not federally taxed

Answer 17

tax-exempt bonds (aka municipal bonds)

Question 18

bonds issued by the federal government as a way of borrowing money

Answer 18

savings bond

Question 19

savings plans that require their depositors to leave their money on deposit for a certain period of time

Answer 19

time deposits

Question 20

certificates issued by the US Treasury in exchange for borrowed money in min. amounts of $10000 maturing in 3 months to 1 year

Answer 20

Treasury Bills

Question 21

certificates issued by the US Treasury in exchange for borrowed money in min. amounts of $1000 and $5000 maturing 10+ years

Answer 21

Treasury Bonds

Question 22

certificates issued by the US Treasury in exchange for borrowed money in min. amounts of $1000 and $5000 maturing in 2-10 years

Answer 22

Treasury Notes

Question 23

company plans that provide for retirement income

Answer 23

pension plan

Question 24

purchase and sale of stocks and bonds, often of smaller lesser-known companies which takes place outside the normal stock exchanges

Answer 24

over-the-counter market