ECONOMICS: Chapter 6 Questions				Name____________________ Hour____

6.1: Saving Money

1. Describe the benefits of money market accounts.

2. 	What type of accounts does the FDIC insure?

3. 	What type of accounts does the NCUA insure?

4. What is a CD?

5. This is the period of time at the end of which time deposits will pay a stated rate of interest.

6. This refers to a savings plan that requires savers to leave their funds on deposit for a certain period of time.

6.2: Investing

7.  Explain how U.S. savings bonds work.  What do you pay and how do you earn money?

8. What do Treasury notes, bills, and bonds all have in common? 

9. 	What is the Dow-Jones Industrial Average?

10. Explain the differences between stocks, bonds, and savings accounts?  Which has more risk and which has more 
    earning potential?

	 
11. This is the increase in value of an asset, such as stock, from its purchase to when it is sold.

12. This certificate is issued by the U.S. Treasury for a minimum of $1,000.

13. What does a broker do?

14. These are bonds sold by local or state governments on which the interest is not taxed by the federal government.

15. This is the electronic purchase and sale of stocks and bonds which takes place outside the organized stock exchanges.

16. This is an investment company that pools the funds of many individuals to buy stocks, bonds or other investments.

6.3: Special Savings Plans

17. 	Describe some disadvantages of investing in real estate.

18. What is a pension?

19. 	This is a retirement plan that allows self-employed people to save part of their income in a tax-deductible account.

20. 	What does diversification refer to?

21. This is a private retirement plan that allows individuals or married couples to defer taxation on the interest they earn on
    their retirement savings.