If You Earn and Spend $2,000 Per Month and Maintain

question 126

Multiple Choice

If you earn and spend $2,000 per month and maintain an average cash balance of $500 per month, your velocity of money is

• A) $1,250.
• B) 2.
• C) 4.
• D) $1,500.

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Definitions:

Defined-Benefit Plan

A type of pension plan in which an employer promises a specified pension payment upon retirement, determined by a formula considering factors like salary and duration of employment.

Cash Balance Plans

A type of defined benefit pension plan that holds an employee's retirement savings as a hypothetical account balance, which grows annually through employer contributions and interest credit rates.

Experienced Employees

Workers who have accumulated significant skill and knowledge in their field through prolonged exposure to various professional situations.

Short-Term Disability Insurance

Insurance that pays a percentage of a disabled employee's salary as benefits to the employee for six months or less.