ECON3_Chapter 2

Interest is

• something you pay in addition the the price of a good

• money borrowed to buy a house

• compensation for saving or borrowing money

• the money paid monthly for insurance

Anna's parents save €100 per month for her college education. This is an example of a...

• precautionary motive

• goal motive

• capital motive

• future motive

You deposit € 3,700 in a savings account at 3% interest. How much interest did you earn after 4 years?

Which answer is correct? For a fixed rate bond...

• the interest rate is variable

• savings are freely withdrawable

• another name is "Easy access savings account"

• you pay a penalty for taking your money early

Choose the correct answer. Investing is

• the same as having a savings account

• only risky outside of Europe

• only buying bonds

• riskier than saving

You borrow € 4,500 with monthly instalments of € 150.

The duration of the loan is 3.5 years. How much are your credit costs?

Conditions for borrowing include:

• the individual's credit score

• the level on interest

• the person's debt-income ratio

• all of the listed options

VAT is an example of

• income taxes

• payroll taxes

• indirect taxes

• direct taxes

A tube of toothpaste costs € 1.50 excluding VAT of 21%. How much do you pay for the toothpaste?

How much is the budget deficit?