the economics of money, banking, and financial markets

341 #

© 2014 Pearson Canada Inc.#

9. 
   

   The Canada Pension Plan ____.
   A) is a government-administered pension plan
   B) is a "pay-as-you-go" system
   C) is underfunded
   D) All of the above
   Answer: D
   Diff: 1 Type: MC Page Ref: 279
   Skill: Applied
   Objective List: 12.2 Understand the key aspects of pension funds

   
   


10. 
    

    Personal pension plans ____.
    A) are different from RRSPs
    B) cannot be converted to annuity or a RRIF on retirement
    C) provide tax-sheltered, self-financed retirement funds
    D) are government-administered
    Answer: C
    Diff: 1 Type: MC Page Ref: 280
    Skill: Recall
    Objective List: 12.2 Understand the key aspects of pension funds

    
    


11. 
    

    What are three suggestions given for privatizing public pension plans?
    Answer:

    
    

1. Government investment of trust fund assets in corporate securities.


2. Shift of trust fund assets to individual accounts that can be invested in private assets.


3. Individual accounts in addition to those in the trust funds.
   Diff: 3 Type: SA Page Ref: 280
   Skill: Recall
   Objective List: 12.2 Understand the key aspects of pension funds

12. Discuss what RRSPs are and how they help to provide income at retirement.
    Answer: RRSPs are personal pension plans that provide tax-sheltered, self financed retirement
    funds. Upon retirement, an RRSP must be converted into an annuity or a Registered Retirement
    Income Fund (RRIF), which provides taxable annuity payments.
    Diff: 2 Type: SA Page Ref: 280
    Skill: Recall
    Objective List: 12.2 Understand the key aspects of pension funds