A business that invests in a federal “CD” (certificate of deposit, where they basically loan the government money in order to gain interest payments on it) would be earning:

Question

(1 point)
Responses

passive income.

active income.

balanced income.

stock income.

GPT-4o mini · Answer

A business that invests in a federal certificate of deposit (CD) would be earning passive income.

Passive income refers to earnings generated with minimal effort or active involvement, which is the case with CDs, as the business is simply receiving interest payments on their investment without engaging in ongoing activities or services.