PAYMENT SYSTEM

Question 1

TRUE OR FALSE. A loan that is considered low risk by the lender will have a lower interest rate.

Answer 1

TRUE

Question 2

Who sets the interest rate?

Answer 2

The country’s central banks set the interest rate.

Question 3

• It is valued because it is a legal tender authorized to be used as a form of payment, does not have intrinsic value but is used as a medium of exchange.

Answer 3

Paper money

Question 4

It is an unconditional order in writing addressed by 1 person to another, signed by the person giving it, requiring the person to pay on demand, or at a fixed determinable future time.

Answer 4

Bill of exchange

Question 5

What are the other forms of payment?

Answer 5

1. Debit card
2. Credit card
3. Proximity mobile payment
4. Automated cleaning house
5. E-money
6. Bitcoin

Question 6

Who are the original parties of the bill of exchange?

Answer 6

Drawer

Drawee

Payee

Question 7

It issued by a bank allowing the holder to transfer money electronically to another bank

Answer 7

debit card

Question 8

It is the electronic clearing and settlement system used for financial transactions, examples are employers pay wages through direct deposit to their accounts.

Answer 8

Automated clearing house

Question 9

It is a digital ledger where transactions are recorded publicly and chronologically and allows individuals and companies to make transactions without any middlemen if they are decentralized.

Answer 9

blockchain

Question 10

It is an economic state whereby financial transactions are not conducted with money in the form of physical banknotes or coins but rather through the transfer of digital information, usually an electronic presentation of money between the transacting parties.

Answer 10

Cashless society

Question 11

The bank immediately credits the seller’s account and debits the buyer’s account.

Answer 11

debit card

Question 12

It is the electronic store of monetary value on a technical device that is widely used for making payments.

Answer 12

E-money

Question 13

Who regulates Bitcoin?

Answer 13

SEC

Question 14

It allows you to spend on credit that you are then payback.

Answer 14

Credit card

Question 15

It is the payment to a merchant initiated from mobile and uses near field communication (NFC) technology near a merchant’s point-of-sale.

Answer 15

Proximity mobile payments

Question 16

It is a device act as a prepaid bearer instrument.

Answer 16

E-money

Question 17

It is a digital currency or crypto-currency and not backed by any central bank or government but can be traded for goods and services that accept it.

Answer 17

bitcoin

Question 18

What technology does bitcoin use?

Answer 18

Blockchain

Question 19

It is issued by a bank allowing the holder to purchase goods against a line of credit

Answer 19

Credit card

Question 20

It is attached to a bank account and allows you to spend the existing fund

Answer 20

Debit card

Question 21

It is the one who issues and draws the order bill and does not pay directly

Answer 21

Drawer

Question 22

TRUE OR FALSE. The fundamental idea is the drawer has funds in the hands of the drawee.

Answer 22

True

Question 23

It is the one who originally issued

Answer 23

Payee

Question 24

What are the 3 importance of checks?

Answer 24

1. Checks are negotiable instrument - They can be used as a substitute for money.
2. Constitute the medium of exchange for the most commercial transaction - it increases the purchasing medium in circulation and eliminates the need to count coins
3. Serves as a medium of credit transaction - when cash is not available, a check can be issued payable until a future date.

Question 25

What is the constraint on the use of checks?

Answer 25

it requires more trust on the part of the seller as compared with accepting bills.

Question 26

It is a negotiable instrument in the form of a bill of exchange.

Answer 26

Checks

Question 27

It is a system wherein BSP has the sole authority to issue paper currency

Answer 27

Fiat money system

Question 28

It is the coins minted from the previous metals.

Answer 28

commodity.

Question 29

It is the currency without intrinsic value that has been established as money.

Answer 29

Fiat money

Question 30

It is recognized as means to settle a public or private debt or to meet financial obligations.

Answer 30

Legal tender

Question 31

TRUE OR FALSE. Interest rate functions as the price in the money market.

Answer 31

TRUE

Question 32

What is the relation between the interest rate and the cost of debt?

Answer 32

Direct proportional

Question 33

How interest rates are determined in Keynesian theory?

Answer 33

1. Investment fund | 2. Liquid assets.

Question 34

What is the function of the interest in the investment funds?

Answer 34

The rate balances the demand for funds and the supply of funds.

Question 35

TRUE OR FALSE. Holding assets is readily available money.

Answer 35

TRUE

Question 36

It consists of objects having value or use in themselves (intrinsic value) as well as their value in buying goods.

Answer 36

Commodity money

Question 37

It is money that is often governed by government regulation and only has value because the government designed it as a legal tender.

Answer 37

Fiat money

Question 38

It is the party to whom the bill is addressed and who is ordered and expected to pay

Answer 38

Drawee or bank

Question 39

When the central bank sets interest rates at a high level, the cost of debt ____.

Answer 39

rises

Question 40

What are the benefits of a cashless society?

Answer 40

1. Lower crime 2. Less money laundering 3. Less time and cost associated with handling paper money

Question 41

What are the disadvantages of a cashless society?

Answer 41

1. Exposes your personal information 2. No alternative source of money 3. Technology problems can leave you with no access to your money 4. Poor and those without bank accounts will have difficulty paying and receiving payments. 5. Harder to find it harder to control spending when they don't see physical cash leaving their hands.