PFL 9W Test (1st 9W)

Which of the following bank accounts is recommended to SAVE money for a vacation?

• Savings Account

• Checking Account

• IRA

• Mutual Funds

What is the first step towards STARTING A SAVINGS PROGRAM?

• set financial goals

• sign up for direct deposit

• open checking account

• obtain credit

A monopoly occurs when ONE company CONTROLS an entire Market. For example, if Apple was the only company to sell phones, they would be considered a monopoly. Monopolies are illegal in the US. Why do you think the US government does NOT allow monopolies to develop?

• to keep prices low

• to encourage competition

• to increase supply

• to decrease demand

When you borrow money from a bank you pay THEM interest. If you put your money in certain bank accounts, the bank pays YOU interest. Which of the following is the best bank account?

• An account that pays you interest DAILY

• An account that pays you interest WEEKLY

• An account that pays you interest MONTHLY

• An account that pays you interest YEARLY

Budgeting is important so that you know what your money is being spent on. Money is assigned to an emergency budget, variable expenses and fixed expenses. What do you think disposable money is?

• money used in case of an emergency

• money spent on house bills

• money lost

• money left over to spend

When you borrow money from a bank you pay THEM interest. If you put your money in certain bank accounts, the bank pays YOU interest. The following are average interest rates paid on different types of bank accounts available:

Savings Account: .4%

Certificates of Deposit Account: 1%

IRA: 8%

What is a drawback of a savings account?

• low minimum balance

• low rate of return

• easy to take money out of account

• easy to put money into account

Which of the following accounts BEST matches these characteristics?
-ATM access

-Debit card usage

-Low interest rate

-Federal deposit insurance

• certificate of deposit

• money market fund

• interest earning checking account

• money market account

Making financial decisions include which of the following?

• saving money

• spending money

• sharing money

• all of the above

PERSONAL risks include all EXCEPT

• loss of job

• illness

• medical emergency

• pay raise

Which of the following promotes economic stability?

• the government looking at contractors to build a new city hall

• a tax credit for people who buy a home

• congress extending unemployment benefits

• increasing taxes to build a highway