Introduction to Business

Chapter 30: Savings Accounts

Chapter Practice Review Quizzes

1
Which is NOT a reason people set up a savings plan?
A)to make major purchases
B)to provide for emergencies
C)to make short-term purchases
D)to provide income for retirement
2
What percent of your income do experts say you should save?
A)0.05
B)0.1
C)0.15
D)0.2
3
Which will NOT make a sizeable impact on your retirement fund?
A)your credit rating
B)how much you invest
C)the rate of return
D)the number of years the investment grows
4
How many months of income do experts recommend you set aside for emergencies?
A)2 months
B)4 months
C)6 months
D)12 months
5
Which term refers to someone who deposits money into a savings account at a bank?
A)a debtor
B)a creditor
C)a drawee
D)a drawer
6
Which is NOT a benefit to the economy when people save money?
A)Consumers can use loans to buy things.
B)Companies can use loans to update their facilities.
C)Companies can use loans to buy more equipment.
D)Banks can stockpile more cash.
7
Which term refers to interest earned on both the principal plus any interest previously earned?
A)simple interest
B)compound interest
C)variable interest
D)fixed interest
8
Which is NOT one of the three basic types of savings accounts?
A)regular savings account
B)certificates of deposit
C)debit account
D)money market funds
9
Which savings account typically offers the lowest interest rate?
A)regular savings account
B)certificates of deposit
C)debit account
D)money market funds
10
Which savings account requires you to deposit a specific amount of money in an account for a set period of time?
A)regular savings account
B)certificate of deposit
C)debit account
D)money market fund
11
Which term refers to a pool of money put into a variety of short-term debt by businesses and government?
A)regular savings account
B)certificates of deposit
C)credit account
D)money market funds
12
Which term means the ability to turn an investment into cash?
A)inflation
B)insurance
C)liquidity
D)compound interest
13
Which is NOT an advantage to a savings account?
A)insurance against loss
B)liquidity
C)low rates of return
D)earns interest
14
Which is NOT a disadvantage to a savings account?
A)penalty for early withdrawal
B)earns interest
C)fees for deposits or withdrawals
D)interest earned is taxed
15
Which term refers to a general increase in the cost of goods and services?
A)inflation
B)recession
C)interest
D)investment
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