WorksheetsWhat is Liquidity & Inflation?
Total questions: 21
Worksheet time: 11mins
What does liquidity refer to?
Liquidity refers to how easily an asset can be converted into cash without losing its value.
Liquidity refers to the profitability of a company.
Liquidity refers to the amount of debt a company has.
Liquidity refers to the market share of a company.
Which of the following is an example of HIGH liquidity? (liquidity = how quickly you can turn assets into cash)
Real estate
Money in a checking account
Collectibles
Stocks
What is inflation?
Inflation is the general increase in prices over time, meaning your money buys less than it used to.
Inflation is the decrease in prices over time, meaning your money buys more than it used to.
Inflation is the process of printing more money by the government.
Inflation is the increase in the value of money over time.
If a candy bar costs 1todaybut 1.10 next year, what economic concept does this illustrate?
Liquidity
Inflation
Deflation
Stagnation
What is interest according to the passage?
Interest is basically the thank-you money the bank gives you for letting them hold onto your money.
Interest is the fee you pay to the bank for keeping your money safe.
Interest is a type of tax imposed by the government on savings.
Interest is a penalty charged by the bank for withdrawing money early.
Explain the process of how banks use your money according to the passage.
Banks keep your money in a vault and do not use it.
Banks use your money to make loans to other customers.
Banks invest your money in the stock market without your consent.
Banks use your money to pay their employees' salaries.
Banks pay you interest because:
they want to attract more customers.
they need to make a profit.
they use your money to lend to others.
they are required by law.
When you deposit money in a bank, what happens?
The money is stored in a vault.
The bank uses it for investments.
It is converted to gold.
It is sent to the government.
The benefit for you when you deposit money in a bank is:
Earning interest on the deposited amount
Losing money due to bank fees
No benefit at all
Immediate access to a loan
In the super simple example, if you put $100 in a savings account, how much do you have after one year if the bank pays you 1% interest?
$100
$101
$102
$99
What is a checking account designed for?
Everyday spending
Long-term savings
Investing in stocks
Paying off loans
Which type of account allows you to deposit and withdraw money easily using checks, debit cards, or online transfers?
Checking account
Savings account
Fixed deposit account
Retirement account
Which type of account is very liquid, allowing you to access your money at any time?
Checking account
Savings account
Certificate of Deposit
Money Market Account
What type of account usually earns little to no interest?
Checking account
Savings account
Certificate of Deposit
Money Market Account
Which type of account earns interest over time?
Savings account
Checking account
Credit account
Cash account
What is a Certificate of Deposit (CD)?
A time-based savings account where you agree to leave your money in the bank for a set period and the bank pays you interest in return.
A type of credit card with a fixed interest rate.
A checking account with no minimum balance requirement.
A loan offered by banks with a variable interest rate.
Which of the following is a benefit of a Certificate of Deposit (CD)?
High liquidity
Fixed interest
No penalties for early withdrawal
Not FDIC insured
What is the maximum amount protected by FDIC insurance for a Certificate of Deposit (CD)?
$250,000
$100,000
$500,000
$1,000,000
Which of the following is a risk associated with a Certificate of Deposit (CD)?
High interest rates
Early withdrawal penalties
Unlimited access to funds
No interest earned
What is a Money Market Account (MMA)?
A type of interest-earning account that combines features of both savings and checking accounts.
A type of account used exclusively for stock trading.
A high-risk investment account with no interest.
A government bond account with fixed returns.
Which of the following is a benefit of Money Market Accounts?
Lower interest rates
Higher interest rates than savings
No check-writing flexibility
Unlimited transactions
