POB Chapter 8

Raphael decided that his business needed a loan. Which one of these institutions is NOT a main loan-providing institution for individuals and businesses?

• Commercial bank

• Agricultural development bank

• Central bank

• Merchant bank

The term ATM means

• automatic teller machine

• automated telling machine

• automated teller machine

• automatic telling machine

Luis Cave received a cheque from Jim James with two parallel lines drawn across its face. This cheque can be

• cashed at any commercial bank

• cashed only by James's bank

• voided as the cheque has been defaced

• deposited into Cave's account

Republic bank performs all of the following functions EXCEPT

• providing advances

• accepting cheques

• issuing notes and coins

• trading in foreign currancy

A standing order is a service provided by a commercial bank. This involves

• customers instructing the bank to make payments of fixed amounts from their accounts

• customers instructing the bank to make payments of varying amounts from their accounts

• the recipient instructing the bank to make payments of fixed amounts to their account

• the recipient instructing the bank to make payments of varying amounts to their account

The MAIN function of the central bank will be to

• accept deposits

• arrange payments

• anyone in provide security

• implement monetary policies

Inflation occurs when prices in an economy

• fall

• remain the same

• rise

• fluctuate

Which of the following would the Central Bank pursue to limit the ability of Scotia Bank to increase its monetary supply?

• Increase the minimum lending rate

• Increase government securities

• Decrease the cash ratio level

• Decrease special deposits

Central Bank can seek to reduce inflation levels by utilizing which one of the following methods?

• Issuing new money into the financial system

• Increasing interest rates to boost savings

• Resorting to act as the banker's bank

• Resorting to act as the government's bank

Money management is encouraged to

• maximise future spending

• facilitate impulse spending

• restrict spending on a whole

• maximise current spending