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Financial Markets > PAYMENT SYSTEM > Flashcards

PAYMENT SYSTEM Flashcards

1
Q

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

A

TRUE

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2
Q

Who sets the interest rate?

A

The country’s central banks set the interest rate.

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3
Q
  • 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.
A

Paper money

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4
Q

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.

A

Bill of exchange

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5
Q

What are the other forms of payment?

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

Who are the original parties of the bill of exchange?

A

Drawer

Drawee

Payee

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7
Q

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

A

debit card

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8
Q

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

A

Automated clearing house

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9
Q

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.

A

blockchain

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10
Q

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.

A

Cashless society

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11
Q

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

A

debit card

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12
Q

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

A

E-money

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13
Q

Who regulates Bitcoin?

A

SEC

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14
Q

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

A

Credit card

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15
Q

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

A

Proximity mobile payments

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16
Q

It is a device act as a prepaid bearer instrument.

A

E-money

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17
Q

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.

A

bitcoin

18
Q

What technology does bitcoin use?

A

Blockchain

19
Q

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

A

Credit card

20
Q

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

A

Debit card

21
Q

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

A

Drawer

22
Q

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

A

True

23
Q

It is the one who originally issued

A

Payee

24
Q

What are the 3 importance of checks?

A
  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.
25
Q

What is the constraint on the use of checks?

A

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

26
Q

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

A

Checks

27
Q

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

A

Fiat money system

28
Q

It is the coins minted from the previous metals.

A

commodity.

29
Q

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

A

Fiat money

30
Q

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

A

Legal tender

31
Q

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

A

TRUE

32
Q

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

A

Direct proportional

33
Q

How interest rates are determined in Keynesian theory?

A
  1. Investment fund

2. Liquid assets.

34
Q

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

A

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

35
Q

TRUE OR FALSE. Holding assets is readily available money.

A

TRUE

36
Q

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

A

Commodity money

37
Q

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

A

Fiat money

38
Q

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

A

Drawee or bank

39
Q

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

A

rises

40
Q

What are the benefits of a cashless society?

A
  1. Lower crime
  2. Less money laundering
  3. Less time and cost associated with handling paper money
41
Q

What are the disadvantages of a cashless society?

A
  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.

Financial Markets (10 decks)

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