What is the difference between defined benefit and defined contribution retirement plans? Why are employers switching to defined contribution plans?
What will be an ideal response?
Defined benefit plans provide retirees a predetermined amount of money monthly, whereas defined contribution plans allow employees to put in a fixed amount of money monthly. The payouts from defined contribution plans vary with market fluctuations, while the payouts from defined benefit plans are fixed by contract. Employers are switching to defined contribution plans because it is difficult to maintain fixed payouts during adverse business conditions.
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Funds lent to start-up firms in return for shares of the profit if the firms succeed are called:
A. retained earnings. B. time deposits. C. venture capital. D. transfer payments.
Suppose a bank has $100 million in checking account deposits with no excess reserves and the required reserve ratio is 10 percent. If the Federal Reserve reduces the required reserve ratio to 8 percent, then the bank can make a maximum loan of
A) $0. B) $2 million. C) $8 million. D) $10 million.
On a balance sheet, short-term debts such as accounts payable are listed as
A) current liabilities. B) stockholder's equity. C) goodwill. D) current assets.