Economics: Work and Prosperity Test 4

____________ is the theory that the variation in the money supply is the main source of economic fluctuations.

 In Proverbs, the Bible instructs people to go to the ___ to learn how to work.

Why is the federal Social Security system a bad investment?

Explain how the fractional reserve system of banking allows banks to hold less than 100 percent of deposits in reserve.

Match each definition with the correct term.

•  pension plan

• a contract between two parties of protection against certain types of loss in exchange for payments

• corporation

• an arrangement for the intent of providing for retirement from work

• insurance

• legal entity which is distinct from the people who own it

Match each definition with the correct term.

• liquid investments

• protects stockholders from paying the firm's creditors in event of failure or bankruptcy

• limited liability

• assets that flow easily since they can be converted into other investments

• mutual funds

• allow for the investment of money in a wide variety of areas

What does CD stand for?

What is legal tender that is backed by only a government's promise?

In market economies, most of the savings needed to fund R&D comes from the _______ sector.

The U.S. money supply is managed by the _______ ______.