AnswersOnline Introduction to Business - EL3501 ABusiness Costs

Introduction Answers

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1
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If you want to compare two different investments, what should you calculate?

A
The compound interest
B
The ROI percentages
C
The ROI dollar amounts
D
The capital gain
2
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If you have many competing financial goals, what should you do to help yourself focus on the most important ones?

A
Get more unearned income.
B
Prioritize and make a budget.
C
Open a checking account.
D
Diversify your investments.
3

As a unit of measure, money makes it easier for consumers to do what?

A
Compare prices of different products.
B
Make a bigger profit from their income.
C
Have a better exchange rate with other currencies.
D
Get more unearned income.
4

If you plan to take money out of the bank frequently, what type of account should you get?

A
A savings account
B
A checking account
C
An interest account
D
An investment account
5

A good investment should do one or both of which two things?

A
Grow in value or produce income
B
Raise prices or increase demand
C
Avoid opportunity cost or increase volatility
D
Decrease diversification or decrease interest
6

Why can a bank afford to pay an interest rate on a savings account?

A
Because the bank is insured by the FDIC
B
Because the Fed prints more currency when needed
C
Because the bank puts the money into equity investments
D
Because the bank lends that money out at a higher interest rate
7

A __________ is when you take money out of the bank.

A
Deposit
B
Transfer
C
Branch
D
Withdrawal
8

If you want to take advantage of compound interest, what should you do when an investment produces interest?

A
Use the interest to pay your bills.
B
Reinvest the interest.
C
Put the interest in a savings account.
D
Put the interest in a checking account.
9

What is most likely to happen if the Fed prints too much currency?

A
A decrease in product prices
B
A decrease in the number of banks
C
An increase in inflation
D
An increase in spending power
10

What is the best way to deal with volatility and get the best return on your investment?

A
Invest only in very safe investments.
B
Put your money in a savings account.
C
Avoid investments that create capital gains.
D
Use diversification.

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