Question

1. why are savings accounts less liquid than checking accounts?

they are considered currency in circulation
they have limits on number of withdrawals
they can be spent directly with debit cards
they have no restrictions

Explanation:

Liquidity refers to how quickly an asset can be converted to cash without losing value. Checking accounts are highly liquid as they are designed for daily transactions. Savings accounts, while still accessible, often have limits on the number of withdrawals (e.g., under federal regulations like Regulation D, which limited certain types of withdrawals to 6 per month before being revised).

• The option "They are considered currency in circulation" is incorrect as savings accounts are not currency in circulation.
• The option "They can be spent directly with debit cards" is more characteristic of checking accounts.
• The option "They have no restrictions" is false as savings accounts do have some restrictions (like withdrawal limits).

Answer:

They have limits on number of withdrawals