chapter 7 & 8 review game. question 1 – true or false when you save, you trade spending now...
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Chapter 7 & 8Review Game
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Question 1 – True or False
When you save, you trade spending now for the ability to
spend in the future.
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Answer
True
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Question 2 – True or False
Money market accounts pay higher interest rates than regular savings accounts.
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Answer
True
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Question 3 – True or False
Almost all deposits are insured by a federal government
agency.
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Answer
True
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Question 4 – True or False
Banks work to earn a profit by selling financial services.
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Answer
True
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Question 5 – True or False
When you receive a check, you must deposit all of it in your
account.
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Answer
False
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Question 6 – True or False
Banks usually send reports of your checking account activity
each month describing the activity on your account.
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Answer
True
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Question 7 – True or False
You should reconcile your bank account about once every six
months.
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Answer
False
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Question 8 – True or False
It is good policy to record the transaction as soon as you write
a check or make a deposit.
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Answer
True
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Question 9
The FDIC insures bank deposits in most banks up to a maximum of ____.a. $75,000b. $50,000c. $100,000d. none of the above
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Answer
c. $100,000
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Question 10
Trading goods and services without using money is ____.a. borrowingb. barteringc. depositingd. none of the above
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Answer
b. bartering
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Question 11
Having the bank deduct a certain amount from your checking account each month to pay a bill is a(n) ____.a. automatic withdrawalb. registerc. feed. none of the above
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Answer
a. automatic withdrawal
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Question 12
A bank's own personal check signed by the bank's cashier is a ____.a. money orderb. cashier's checkc. traveler's checkd. none of the above
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Answer
b. cashier's check
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Question 13
The book in which a person keeps a record of the checks he or she has written and the deposits made is called a ____.a. folderb. check registerc. balance bookd. none of the above
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Answer
b. check register
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Question 14
Which of the following are checks for which you pay in advance and, if they are lost or stolen, the company from whom you bought these checks will replace them?a. canceled checksb. outstanding checksc. traveler's checksd. none of the above
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Answer
c. traveler's checks
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Question 15
Kirk recently opened his own checking account with a local bank. The first check he wrote was to BestBi Food Mart for groceries and miscellaneous items in the amount of $43.75. Since BestBi is the business to whom Kirk wrote the check, BestBi is considered to be the ____.a. payerb. drawerc. payeed. drawee
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Answer
c. payee
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Question 16
Francesca opened a checking account at First Union Bank approximately one month ago. Throughout the month she wrote 25 various checks for which First Bank will charge her $.25 per check. This fee per check is known as a(n) ____.a. service chargeb. maintenance feec. checking feed. debit fee
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Answer
a. service charge
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Question 17
Taylor works as a real estate agent and is an extremely busy young woman. Her work days are filled with appointments with clients who are either selling or buying homes. Her schedule is highly unpredictable, making it almost impossible to go to her bank to conduct her banking business. What service can she arrange with her employer and her bank so that her paycheck is conveniently and automatically deposited into her account each pay period?a. pay by phoneb. direct depositc. ATM depositd. online deposit
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Answer
b. direct deposit
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Question 18
Each month Hope's bank sends her an envelope containing her bank statement and the checks that have cleared her checking account that particular month. Each of these checks have been stamped indicating that her bank has paid the check. What are these checks called?a. reconciledb. clearedc. paidd. canceled
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Answer
d. canceled
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Question 19
Octavio travels extensively on business often traveling out of state. Because of his traveling and hectic schedule, he does not like to carry a large amount of cash with him nor does he want to carry his checkbook. What could he opt to use that would provide electronic access to his checking account to make payments at stores, restaurants, etc., by immediately transferring funds from his checking account into the store's account?a. ATM machineb. PINc. debit cardd. both A and B
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Answer
c. debit card
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Question 20
Muong is about to graduate from high school. He plans to attend community college in the fall. To help him with some of his expenses, many of his relatives are giving him cash as a graduation present. His great aunt, however, gives him a check for $200. Since Muong does not yet have a checking account he will give the check to his mother, Fay, to cash. He turns the check over on the back, signs his name; immediately under his signature he writes, "Pay to the order of Fay Nguyen." This type of check is known as a(n) ____.a. transfer checkb. third party checkc. endorsed checkd. certified check
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Answer
b. third party check
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Question 21
Today is Yolanda's payday. She has decided to deposit her entire paycheck into her checking account. What will she need to provide the bank in order to complete this type of transaction?a. endorsed check and deposit slipb. identificationc. both A and Bd. PIN
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Answer
a. endorsed check and deposit slip
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Question 22
Bryce is the Business Manager for a large dress-making company located in New York City. His company has just sold $125,000 worth of dresses and other ladies apparel to a company located in Hamburg, Germany. What type of banking arrangement can the German company make with its bank to immediately move $125,000 of its money into the New York company's bank in order to pay for the dresses?a. traveler's checksb. certified checkc. wire transferd. ATM transfer
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Answer
c. wire transfer
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Question 23
Stuart has been confined to home for the past two months unable to attend regular classes at his high school. His economics teacher has asked him to research the advantages associated with banks and checking accounts. Which of the following is not an advantage?
a. banks are regulated and, therefore, provide security for money
b. there are no costs associated with banking services
c. banks can increase a consumer's purchasing power
d. money is better protected from robberies in a bank than in a person's home
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Answer
b. there are no costs associated with banking services
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Question 24
A written promise to pay a debt by a specified date is called a ____.a. yieldb. bondc. bank depositd. none of the above
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Answer
b. bond
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Question 25
If you deposit $200 in an account that pays 6 percent simple interest per year, which of the following would be the balance in your savings account at the end of the first year?a. $210b. $250c. $212d. none of the above
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Answer
c. $212
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Question 26
Interest that is paid on the principal and also on previously earned interest, assuming that the interest is left in the account, is called ____.a. simple interestb. compound interestc. interestd. none of the above
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Answer
b. compound interest
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Question 27
Liz was recently employed as a school teacher with an area school district. As a school teacher she can choose to join a financial institution that offers her membership when she deposits her money there or opens a checking account. The type of financial institution that offers memberships to these educational professionals is known as a(n) ____.a. savings bankb. savings and loanc. commercial bankd. credit union
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Answer
d. credit union
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Question 28
Marlan has accumulated $700 in his savings account; however, he is earning only 5.25 percent simple interest on his savings. He would like to take all or part of his savings and invest in some type of account that would pay him a higher interest rate. Given the amount he has to invest, which of the following would be his best choice?a. certificate of depositb. money market accountc. savings bondd. Series HH bonds
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Answer
a. certificate of deposit
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Question 29
Coop lives in a large metropolitan area and, therefore, has several types of financial institutions from which to choose. He has $25,000 to deposit and prefers owning part of the institution in order to receive dividends. Which institution matches his preferences?a. credit unionb. savings bankc. savings and loand. commercial bank
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Answer
b. savings bank
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Question 30
If Lucas and Jewel have a down payment for a home and have found the home they want to purchase, which type of financial institution specializes in lending money to consumers to buy homes?a. credit unionb. savings bankc. commercial bankd. savings and loan
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Answer
d. savings and loan