Question 1

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. This is because paper checks require manual processing, which is time-consuming and expensive, whereas electronic payments can be handled automatically, saving time and money for the bank. Additionally, electronic payments can be processed more quickly, reducing the time it takes for funds to be transferred between accounts.

Question 2

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 question is asking for a type of card that can electronically transmit information through an embedded radio-frequency antenna. Smart cards have a microchip that can communicate with a reader using radio waves, making them the best choice for this scenario. Credit and debit cards do not necessarily have this technology, and e-commerce refers to online purchases rather than physical payments at a gas station.

Question 3

The __________ primarily provides for the financing of economic development projects throughout the world.

Accepted Answer

The World Bank primarily provides financing for economic development projects throughout the world. The International Monetary Fund focuses more on promoting international monetary cooperation and facilitating international trade, but it also provides financial assistance to countries experiencing economic difficulties. The International Reserve Bank and World Development Authority are not real entities.

Question 4

Which of the following institutions monitors the monetary policies of member nations to ensure a global monetary system that works best for all nations?

Accepted Answer

The International Monetary Fund (IMF) is responsible for monitoring monetary policies of member nations to maintain a stable and orderly global monetary system. The World Bank focuses on providing financial and technical assistance to developing countries for specific projects, while the International Development Association provides concessional loans and grants to the poorest countries. The International Reserve Bank does not exist as a formal institution.

Question 5

Alan works as a loan officer for a major U.S.commercial bank,specializing in international loans.When considering loans to governments and businesses in other nations,Alan:

Accepted Answer

The statement "is likely to approve loans to foreign borrowers if the return is high enough to justify the risk" suggests that Alan considers the potential return on investment before approving loans to foreign borrowers. This is a common approach taken by international bankers to maximize their returns while minimizing risks. Option A is incorrect as it talks about federal limits which are not necessarily applicable to all banks. Option B is incorrect as it talks about the availability of funds in excess of those sought by American firms, which is not directly related to loan approval to foreign borrowers. Option D is incorrect as it talks about approval from the International Monetary Fund, which may not be required in all cases.

Question 6

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 becomes relatively more attractive for foreign investors to invest in U.S. securities, as they can earn higher returns compared to their home country. Therefore, foreign investors are likely to transfer funds to U.S. investments.

Question 7

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

Accepted Answer

A banker's acceptance is a written promise by a bank to pay a specified amount at a future date, usually within six months. It is a type of negotiable instrument that is often used in international trade transactions to assure payment to the exporter. Unlike a letter of credit, which is an agreement between a buyer and a seller, a banker's acceptance is an unconditional commitment by a bank to pay the specified amount. Certified trade acceptances are similar to banker's acceptances but are only used in domestic transactions. Guaranteed funds agreement is not a common financial term.

Question 8

The World Bank provides funding for:

Accepted Answer

The World Bank primarily provides funding for projects to improve the standard of living in less-developed nations. This includes initiatives in areas such as education, health, infrastructure, and poverty reduction. The World Bank aims to promote economic development and reduce poverty in low-income countries, and works closely with governments and communities to identify and fund projects that can have a positive impact on people's lives.

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 provided to help companies conduct business in other countries by allowing them to convert one currency into another. This enables them to pay suppliers, receive payments from customers, and conduct transactions in different countries. Transaction letters, certificates of deposit, and banker's depositories may also be services provided by banks, but they are not directly related to helping companies conduct business in other countries.

Question 10

Which of the following helps to provide for the smooth flow of money between nations?

Accepted Answer

The International Monetary Fund (IMF) provides for the smooth flow of money between nations through its efforts to promote international monetary cooperation and exchange rate stability. It focuses on maintaining an orderly system of payments and receipts between countries and providing resources to countries experiencing balance of payments difficulties. The other options listed may also play a role in international financial transactions, but the IMF is specifically tasked with promoting international monetary cooperation.

Question 11

Rather than receiving a paycheck,Marissa authorizes his employer to deposit his pay directly into his account at the Mortonville Bank.Her bank also provides her with a ________ card she uses to shop.The retailer uses the card to transfer money from Marissa's account to the store's account.

Accepted Answer

Direct deposit and use of a debit card suggests the use of Marissa's own funds rather than credit (A) or a special-purpose card like a traveler's (B). The term "automatic transfer card" (D) is not commonly used.

Question 12

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. It is often used in international trade transactions to ensure that the seller will receive payment if they fulfill their obligations under the contract. A certificate of deposit is a type of savings account, a callable option is a financial instrument that gives the holder the right, but not the obligation, to buy or sell an asset at a predetermined price within a specified time period, and a banker's acceptance is a promise by a bank to pay a specified amount on a specified date.

Question 13

The Fed announces that it intends to implement policies to increase interest rates.Which of the following correctly identifies the most likely result of higher U.S.interest rates?

Accepted Answer

The answer of The Fed announces that it intends to...

Question 14

H & Q Importers arranged to have a French winery ship a large quantity of fine wine to the United States.By signing a ______________ H & Q authorized its bank to make full payment to the French winery if and when the wine arrives at the H & Q warehouse in Boston.

Accepted Answer

A letter of credit is a document issued by a bank guaranteeing payment to a seller of goods or services, provided that certain documents are presented to the bank. In this case, H & Q is the buyer and is authorizing their bank to make payment to the French winery once the goods (wine) arrive and certain documents are presented, ensuring that H & Q only pays for the goods they received.

Question 15

__________ currently provides for regulating international banking and finance practices.

Accepted Answer

The answer of __________ currently provides for regulating international banking...

Question 16

When comparing a letter of credit and a banker's acceptance for financing international business transactions,a letter of credit:

Accepted Answer

The answer of When comparing a letter of credit and...

Question 17

Critics of the World Bank charge the organization with:

Accepted Answer

The answer of Critics of the World Bank charge the...

Question 18

Which of the following institutions primarily finances economic development projects in less-developed countries?

Accepted Answer

The World Bank is primarily responsible for financing economic development projects in less-developed countries. The International Monetary Fund (A) focuses on providing loans to member countries in financial distress, while the International Development Association (C) is a subsidiary of the World Bank that provides grants and low-interest loans to the poorest countries. The International Reserve Bank (D) is not a real institution.

Question 19

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 commonly used for hotel room access and can store personal information such as name and room number. It requires a code or PIN to unlock the door, ensuring security for the guest. RFID tag and automatic key are not as commonly used in hotel room access as smart cards. A credit card may be used to make payments but it does not typically provide access to the hotel room.

Question 20

The World Bank has received criticism because:

Accepted Answer

The answer of The World Bank has received criticism because:
...

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