What Is the Term for Short-Term IOUs Issued by the Government

question 112

Multiple Choice

What is the term for short-term IOUs issued by the government that mature in 4,13,and 26-week increments?

• A)debentures
• B)Treasury bonds
• C)money market mutual funds
• D)T-bills

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Definitions:

Foregone Interest

The potential interest income lost by choosing an alternative investment or spending decision instead of the present option that yields interest.

FDIC Insurance

A federal guarantee of safety for depositor funds in member banks, up to a defined limit.

Bank Panics

Situations in which a large number of bank customers attempt to withdraw their deposits simultaneously due to fears that the bank will become insolvent.

Checking Deposits

Balances in bank accounts from which funds can be withdrawn by writing a check or using a debit card, usually without any interest benefits.