Computer Information Systems Pre-Test

PRINCIPLES OF BUSINESS AND MARKETING - MR. SHULTZ

“A PENNY SAVED” WORKSHEET

STUDENT NAME ______BLOCK ______

Read the “A Penny Saved” comic and answer the questions below. Complete BOTH SIDES!

1. If people didn’t save, what wouldn’t they have?

1. If we don’t save, when might we run into trouble?

1. What does saving mean?

1. When we save, we give up the opportunity to spend now, in order to have what?

1. What is the advantage to depositing your savings into a bank account instead of keeping it in your house?

1. The word “Bank” is an oversimplification. What are three types of depository institutions?

1. What is compound interest?

1. How do you compute the “Rule of 72”? What does the answer tell you?

1. In general, the longer you are willing to leave your savings in a bank, what happens?

1. Why is the money you deposit in a savings account very liquid?

1. Another reason interest rates are higher on longer-term deposits has to do with inflation, or rising prices. What does inflation do to savings?

1. To protect the value of your savings, what would you want to get?

1. If you put your savings into a certificate of deposit and you withdraw the money before it matures, you pay a penalty – what would the penalty be?

TURN THE PAGE OVER TO COMPLETE THE WORKSHEET

1. Why do banks pay interest on the money you deposit? What do they do with much of the money deposited?

1. What are bank accounts on which you can write checks and in which you can also keep some savings subject to?

1. As a last line of defense, deposits of up to what amount are insured? Who insures them?

1. When you buy savings bonds, what are you doing?

1. What are the two ways you can earn a return if you buy stocks?

1. You can reduce the risk of buying stocks by investing in mutual funds. If you do that, why will you loss be limited even if some companies do badly?

1. What is a disadvantage of some mutual funds?

1. What are two problems with the types of investments – such as real estate and art - that offer the prospects of high returns?

1. In general, what group is most able to save?

1. People who are just starting their careers often dissave. What does that mean and why do they do it?

1. If Americans don’t save, what happens to businesses?

1. When a business wants to build a new building or buy new machinery, what does it usually have to do?

1. What did a 1993 Congressional report say about the savings rate?

1. When people have more wealth, how does that affect their attitude towards saving?

1. According to one theory, how does the Social Security affect savings?