Question 1

A(n)__________ allows money to be exchanged electronically more quickly and more economically than with paper checks.

Accepted Answer

Electronic Funds Transfer (EFT) systems allow for electronic money transfers to occur quickly and cost-effectively. The other options, while related to electronic banking, are not direct alternatives for electronic check exchanges.

Question 2

On payday,employers can designate their banks to electronically transfer funds from the business' checking account to the employees' checking account.This represents an example of a(n):

Accepted Answer

The description best fits the process of direct deposit, where funds are electronically transferred from the employer's bank account to the employee's bank account on payday.

Question 3

Which of the following accurately presents a major difference between Internet banks and traditional banks?

Accepted Answer

Internet banks have lower overhead costs because they do not have to maintain physical branches, leading to potentially higher interest rates and lower fees for customers.

Question 4

A __________ represents an unconditional agreement by a bank to pay a specified amount at a particular time.

Accepted Answer

The answer of A __________ represents an unconditional agreement by...

Question 5

John searched for a new bank prior to filling out his direct deposit form at his new employer.He noted that Twenty/Four/Seven E-Bank,Inc. ,offered better interest rates on savings accounts and money market accounts;and it offered other amenities such as online banking and funds transfer that many traditional banks offer.What is the most logical reason that Twenty/Four/Seven can compete for customers by offering higher interest rates?

Accepted Answer

Since Twenty/Four/Seven does not have any physical locations, it is able to save on overhead costs such as rent, utilities, and maintenance. This allows the bank to offer higher interest rates to its customers while still remaining profitable.

Question 6

Payroll debit cards:

Accepted Answer

Payroll debit cards can be issued to persons without bank accounts and can be used to pay bills online or access cash from an ATM machine. They provide a convenient solution for those who do not have access to traditional banking services.

Question 7

The ________ provides the same results as a check because it withdraws funds from a checking account.

Accepted Answer

A debit card is linked to a checking account and allows the user to withdraw funds from the account, just like a check.

Question 8

Which of the following can include an embedded radio-frequency antenna that allows the holder to access secure areas in buildings or buy gas with the swipe of a card?

Accepted Answer

Smart cards can include an embedded radio-frequency antenna that allows the holder to access secure areas in buildings or buy gas with the swipe of a card.

Question 9

Which of the following is a bank service provided to help companies conduct business in other countries?

Accepted Answer

Currency exchange is a bank service that allows companies to conduct business in other countries by converting one currency to another. Transaction letters, certificates of deposit, and banker's depositories do not necessarily relate to international business transactions.

Question 10

When a customer purchases an item with a debit card:

Accepted Answer

When a customer purchases an item with a debit card, the funds are automatically transferred from the customer's account to the store's account. There is no short-term loan involved, electronic clearinghouse or bill, and the process is different from a credit card transaction.

Question 11

First Data Corporation has developed the GO-Tag,where:

Accepted Answer

The GO-Tag is described as a small chip attached to a cell phone or smaller card, which can make a transaction from one account to another without the need to swipe the card. Option A is not mentioned as a feature of the GO-Tag. Option B refers to a different technology for check verification. Option C is a general description of electronic funds transfer systems and does not specifically describe the GO-Tag.

Question 12

A few retailers enable their customers to pay for gas by using a ________ card that electronically transmits information through an embedded radio-frequency antenna.

Accepted Answer

The description given matches a smart card, which has an embedded radio-frequency antenna and can transmit information electronically. Credit and debit cards may have the ability to pay for gas, but they do not necessarily use this specific technology. E-commerce is a term used to describe online transactions, and is not relevant to this question.

Question 13

A __________ represents an agreement by a bank to pay a foreign company a given amount if certain conditions are met.

Accepted Answer

A letter of credit represents an agreement by a bank to pay a foreign company a given amount if certain conditions are met, such as the receipt of specified documents or the completion of an agreed-upon transaction. A certificate of deposit is a financial instrument representing a deposit of funds at a bank or other financial institution; a banker's acceptance is a time draft drawn on and accepted by a bank; and a callable option is a type of financial derivative.

Question 14

Which of the following explains why Internet banks often offer their customers better interest rates than traditional banks?

Accepted Answer

Internet banks have lower overhead costs because they do not have physical branches or as many employees as traditional banks, allowing them to offer better interest rates to their customers.

Question 15

Juan has an authorized work permit issued by the U.S.government to work in the U.S.Each day,Juan travels from Mexico to El Paso,TX,to work in the construction trade.At the time that he was first employed his U.S.employer issued him a(n)___________.Each week,the employer scans his work stipend onto it.Juan can purchase with it,access cash through an ATM with it,and transfer funds with it.The risk for Juan is:

Accepted Answer

The best choice for Juan would be the payroll debit card, as it allows him to access his funds easily and transfer them as needed. However, there is a risk associated with the card being lost or stolen, as he may not be able to recover any funds that were spent by the unauthorized user. Therefore, Juan should be careful to keep his card secure and report any suspicious activity immediately.

Question 16

If the Fed increases interest rates in the U.S.relative to other nations,

Accepted Answer

When the Fed increases interest rates in the U.S., it makes U.S. investments more attractive to foreign investors. They will transfer funds to U.S. investments to take advantage of the higher interest rates, which can lead to a stronger U.S. dollar.

Question 17

___________ replace the typical magnetic strip on a credit or debit card with a microprocessor.

Accepted Answer

Smart cards replace the magnetic strip with a microprocessor, allowing for more advanced security measures and capabilities such as storing and processing data, authentication, and encryption. Direct deposit cards, e-cards, and check conversions do not necessarily involve the use of a microprocessor or replacing the magnetic strip.

Question 18

Banks prefer that customers use an electronic funds transfer system rather than traditional methods of payment because:

Accepted Answer

Electronic funds transfer is more efficient and less expensive for banks than traditional check-based payments, as it reduces the need for manual processing and transportation of checks.

Question 19

As is common payroll procedure for most employers,Marissa's company _____________ her paycheck bi-monthly into her checking account.This is a paperless process and no check is issued to the employee.By logging into her personnel system,Marissa has record of the net pay that was deposited into her personal checking account and an account of how much was taken out for taxes,Medicare,social security (FICA)and other deductions.Marissa's company has adopted an efficient _________ system.

Accepted Answer

The statement mentions that Marissa's paycheck is deposited bi-monthly into her checking account through a paperless process, without the issuance of a check. This implies that direct deposit is being used as the payment method. Additionally, the statement mentions that Marissa can view the net pay and deductions by logging into her personnel system, which indicates that electronic funds transfer is also being used. Therefore, the best choice is C) direct deposits;electronic funds transfer. Options A, B, and D do not accurately reflect the payment and record-keeping methods described in the statement.

Question 20

Chad travels extensively for his company.He stays at hotels that provide him with a(n)____________ that is imbedded with his personal information as well as a code to unlock his hotel room.

Accepted Answer

A smart card is a portable storage device that contains personal information and can be used for authentication, identification, and data storage. It can be embedded with a code to unlock a hotel room, making it a convenient and secure option for frequent travelers like Chad. RFID tags are also commonly used for hotel room access, but they do not typically contain personal information like a smart card would. Credit cards and automatic keys are not typically used for hotel room access.

Quiz 20: Money, Financial Institutions, and the Federal Reserve

A(n) __________ allows money to be exchanged electronically more quickly and more economically than with paper checks.

On payday,employers can designate their banks to electronically transfer funds from the business' checking account to the employees' checking account.This represents an example of a(n) :