159. Both checks and debit cards will immediately transfers funds from the customer’s account
to the seller’s account.
160. Smart cards contain a microprocessor chip that stores information about the user, such as
driver’s license data and bank balance.
161. Smart cards can allow the user to access secure areas within buildings or buy gas with the
swipe of the card.
162. A
direct payment
is a preauthorized electronic payment.
163. Although there are many new ways to perform electronic funds transfer, legally, the only
way that an employer can pay an employee is by writing a check.
164. Lower fees and better interest rates motivate customers to open accounts with Internet
banks. However, the lack of personal service and concern for information security encourages
some customers to return to a traditional bank.
165. While an electronic funds transfer represents a faster and more flexible method of
making payments than writing checks, it is more expensive for banks.
166. Tim travels extensively on business. Most of the hotels where he stays provide him with a
card that unlocks his room. The card is keyed to the particular lock that matches the lock on the
assigned room, and also contains information about Tim. The type of card that Tim is using is a
smart card.
167. Damian has played supporting roles in a number of movies and is passionate about his
craft to the point where he created a home theatre inside his house. He has satellite where he
receives an unlimited number of movies, and he also has an online account with Netflix. For
added convenience, he has set up direct payment to these companies. This means when his
statement arrives each month, he will get online and tell his bank how much to pay these
vendors.
168. A letter of credit represents a promise that a bank will disburse a specified amount of
funds at a particular time if certain conditions are met.
169. Banks help businesses operate in other countries by exchanging the currency of one
nation for the currency of another.
170. A banker’s acceptance represents a promise that a bank will pay a specified amount at a
specified time if certain conditions are met.
171. When traveling in other countries, tourists can use their MasterCard or Visa bankcards to
obtain foreign currencies at ATMs.
172. More than ever, the American economy operates as a distinctly separate entity from the
international economy.
173. International bankers prefer to invest in their own countries whenever possible.
174. The global money markets trade about $4 trillion every day.
175. International bankers make loans wherever they can get the maximum return for their
money.
176. While Federal Reserve actions impact domestic investors, they have little effect on
decisions made by international investors.
177. The World Bank primarily finances projects to protect the environment.
178. The World Bank primarily finances projects to improve the productivity and standard of
living in less-developed nations.
179. The International Monetary Fund assists with the smooth flow of money among nations.
180. The International Monetary Fund does not lend money.
181. The IMF’s goal is to maintain a global monetary system.
182. Given the size and strength of the U.S. economy and the widespread use of the dollar, the
Federal Reserve essentially regulates international monetary markets.
183. When the Federal Reserve pursues policies that increase interest rates, the amount of
foreign funds flowing into the United States also increases.
184. Abdul Industries wants to import some heavy machinery from a producer located in the
Czech Republic. To facilitate payment to the Czech firm, Abdul arranged for its bank to issue a
banker’s acceptance. Under this arrangement, the bank pays the exporter after the equipment
passes inspection.
185. As a relatively poor nation, Liberia wants to obtain funds for a project to improve the
availability of water and electricity. Liberia should contact the International Monetary Fund.
186. Chipper’s Golf Resort plans to carry an inventory of golf clubs—irons, drivers, and
woods—from a German manufacturer. The manufacturer has promised delivery in four weeks,
which will be just in time for the beginning of Chipper’s golf season at its Chicago course. In
order to prudently watch cash flow, you have recommended that Chipper’s Resort sign a
letter of
credit
with an international bank asking the bank to disburse payment when the clubs arrive at
the Chicago course and after they are inspected.
187. Everything else held constant, an international bank based in New York would prefer to
loan money to an efficient firm operating in San Paulo, Brazil, than an inefficient firm operating in
southern California.
188. __________ includes anything that people generally accept as payment for goods and
services.
189. __________ occurs when goods are traded directly for other goods.
190. Which of the following is not a favorable characteristic of money?
191. Which of the following represents a benefit of coins over paper money?
192. The redesign of and new colors added to U.S. paper money are intended to:
193. The problem with bartering is:
194. Today, a regular _____________ is a system where you can exchange goods for other
goods. You submit your goods and you receive trade credit that you can use to buy other goods.
195. Kimberly trades some of her homegrown tomatoes to her neighbor, Ron, for some green
peppers fresh from Ron’s garden. This type of trade represents an example of:
196. The Fed Chairman is in control of:
197. The ______ category of money supply includes money that is quickly and easily accessed.
198. __________ represents the most commonly used category of the money supply.
199. A rapid increase in the money supply may lead to a(n):
200. When the value of the U.S. dollar increases relative to other currencies:
201. The strength of the U.S. dollar relative to other currencies depends mainly on:
202. The organization responsible for conducting monetary policy in the United States is the:
203. The Federal Reserve System consists of ________ Federal Reserve banks.
204. The board of governors of the Federal Reserve System determines:
205. The Fed uses ________ to regulate the money supply.
206. The ___________ represents one of the Fed’s most powerful monetary policy tools.