It Is Better to Use Your Savings Instead of Borrowing

question 30

Multiple Choice

It is better to use your savings instead of borrowing to make a purchase when:

• A)the borrower has adequate savings.
• B)interest rates are rising.
• C)interest rates are falling.
• D)the cost of borrowing is greater than the interest earned on savings.
• E)the interest earned on savings is greater than the interest paid on the loan.

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Definitions:

Positive Relationship

A connection between two variables where an increase in one variable results in an increase in another.

Independent Variable

In experimentation or statistical analysis, the variable that is manipulated or changed to observe its effects on the dependent variable.

Dependent Variable

In statistical and mathematical analysis, the variable whose value is subject to the influence of another variable.

Horizontal Axis

In graphs and charts, this axis typically represents the independent variable or time period under examination.