CE 12

How does a financial institution encourage savings?

• Pay interest

• Provide a safe place for you to keep your money

• Give away free pizzas

• Advertisement

Which action best completes the graphic?

• Sell real estate

• Coin money

• Sell home insurance

• Make loans

The picture shows how financial institutions act as intermediaries between savers and borrowers by -

• Discouraging saving and investing

• Receiving deposits and making loans

• Spending money that is deposited

• Charging interest on savings

The buying and selling of goods and services by all nations in a worldwide market is called -

• globalization

• NAFTA

• Interdependence

• Megalopolis

What is one way to lower the cost of production?

• Hire additional workers

• Offer discount prices

• Use more resources

• Create new technologies

Dan has $5,000. He wants to invest his money in the type of business that has the least amount of risk. In which type of business should he invest?

• Proprietorship

• Corporation

• Partnership

• Battleship

Which type of business organization can act as one legal entity regardless of its number of owners?

• Entreneurship

• Proprietorship

• Corporation

• Partnership

Some of the profits a business makes are often used to buy more -

• interest

• taxes

• resources

• goods and services

In the U.S. economy, what do businesses buy from consumers?

• Resources (land, labor, etc)

• Interest

• Taxes

• Goods and services

True or False: Free enterprise means that markets are allowed to operate without undue interference from the government. Also, prices are determined by supply and demand.

• True

• False