Question

Which of the following is a characteristic of a checking account?

Easy access to funds through a debit card
Fee charged if money is removed early
High rate of return on deposits
Minimum money amount requirement to invest




Which of these factors is likely to have the greatest influence on purchases by consumers with a limited amount of cash on hand?

The price of a good or service
The price of alternatives or substitutes
Their own income
Their personal preferences

Answer 1

Part 1: Easy access to funds through a debit card

Part 2: The price of a good or service

Step-by-step explanation:

1. Easy access to funds through a debit card

A checking account is among the savings accounts offered by financial institutions. It is the regular or most common savings account in use. Checking accounts are risk-free and hence attract a low-interest rate.

A checking account does not restrict the number of withdrawals, unlike other savings accounts such as the certificate of deposit. Due to this reason, financial institutions have developed a debit card that allows access to the funds in a checking account. A debit card facilitates withdrawal from an ATM or making payments at a POS anytime as long as there are funds in the checking account.

2. The price of a good or service

A consumer with a limited amount of money is most concerned with the price of what they are purchasing. They will likely opt to buy goods and services with relatively lower prices. Economists refer to such goods and services as inferior products, not because of their quality but due to their low prices. As income decrease, the demand for inferior goods increase.