Question 1 (1 point) Which type of IRA uses after-tax money contributions, but h

Question

Question 1 (1 point)

Which type of IRA uses after-tax money contributions, but has no tax upon withdrawal?

Question 1 options:

a)

traditional IRA

b)

Roth IRA

c)

both traditional IRA and Roth IRA

d)

neither traditional IRA nor Roth IRA

Question 2 (1 point)

A bond's price and yield:

Question 2 options:

a)

move in opposite directions.

b)

must sum up to 1,000.

c)

are usually equal in value.

d)

move in the same direction

Question 3 (1 point)

Cash is counted in the money supply as a part of:

Question 3 options:

a)

M1 only.

b)

M2 only.

c)

both M1 and M2.

d)

neither M1 or M2.

Question 4 (1 point)

Which statement is NOT true about Social Security?

Question 4 options:

a)

The minimum age to begin collecting benefits is 62.

b)

It is funded by a payroll tax that is paid by both employees and employers.

c)

Payroll taxes for Social Security are a percentage of income, with no income limit.

d)

Social Security benefits people with longer life spans.

Question 5 (1 point)

The supply curve for loanable funds represents _____ and is _____.

Question 5 options:

a)

investors; upward sloping

b)

investors; vertical

c)

savers; upward sloping

d)

savers; vertical

Question 6 (1 point)

Which source of short-term borrowing charges the highest average interest rates on unpaid balances?

Question 6 options:

a)

car loans for borrowers with good credit

b)

home mortgage loans

c)

ordinary credit cards

d)

student loans

Question 7 (1 point)

As the real interest rate falls:

Question 7 options:

a)

the demand for loanable funds rises.

b)

the quantity demanded of loanable funds rises.

c)

less funds are demanded.

d)

the demand for loanable funds falls.

Question 8 (1 point)

Barter as a system tends to work only:

Question 8 options:

a)

when agricultural products are exchanged.

b)

in primitive economies with little product variety.

c)

among large, multinational corporations.

d)

in small U.S. towns and villages.

Question 9 (1 point)

According to the trade-off between risk and return, which asset would likely have the highest average return on investment over a 20-year period?

Question 9 options:

a)

government savings bonds

b)

shares of stock in social media companies

c)

a 20-year certificate of deposit issued by a bank

d)

highly rated bonds issued by major corporations

Question 10 (1 point)

When investors wish to increase their investment activities by using the market for loanable funds:

Question 10 options:

a)

supply shifts left.

b)

demand shifts left.

c)

supply shifts right.

d)

demand shifts right.

Question 11 (1 point)

Barter:

Question 11 options:

a)

satisfies the double coincidence of wants if an exchange takes place.

b)

serves as store of value in primitive societies.

c)

is any exchange, with or without the presence of money, in which the participants negotiate the terms of trade.

d)

works as well as money in all cases.

Question 12 (1 point)

What are the primary functions of money?

Question 12 options:

a)

unit of account, medium of exchange, store of liquidity

b)

unit of account, medium of exchange, store of value

c)

unit of exchange, medium of account, store of value

d)

unit of liquidity, medium of exchange, store of value.

Question 13 (1 point)

M1 is the most _____ of all assets because as a medium of exchange, it requires no conversion.

Question 13 options:

a)

illiquid

b)

insolvent

c)

liquid

d)

None of the answers is correct.

Question 14 (1 point)

Checking account balances are:

Question 14 options:

a)

part of M1 and part of M2.

b)

part of M1 but not part of M2.

c)

not part of either M1 or M2.

d)

part of M2 but not part of M1.

Explanation / Answer

Question 1 (1 point)

b)

Roth IRA

Roth IRAs do not provide any tax breaks but usually has no tax on withdrawal.

Question 2

A bond's price and yield:

a)

move in opposite directions.

Bond price and yield are inversely related.

Question 3

Cash is counted in the money supply as a part of:

Question 3

c)

both M1 and M2.

This is becasue cash is a part of M1 and M1 is a part of M2.

Question 4

c)

Payroll taxes for Social Security are a percentage of income, with no income limit.

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