The Government of Nation C Operated at a $32 Billion

question 17

Multiple Choice

The government of Nation C operated at a $32 billion deficit this year. The deficit suggests that Nation C's tax system is:

• A) Inefficient
• B) Insufficient
• C) Unfair
• D) Inconvenient

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Definitions:

Presentment Warranties

Guarantees made by the presenter of an instrument (e.g., a check) regarding their authority and the validity of the instrument in a financial transaction.

Acceptor

A person (drawee) who accepts and signs a draft to agree to pay the draft when it is presented.

Draft

An instrument validating an order by a drawer to a drawee to pay a payee.

Imposter Rule

A legal principle concerning negotiable instruments which states that if an impostor induces a payor to issue a check made payable to the impostor, the drawer is liable for the amount to a holder in due course.