Sarah Has a Checking Account at First Bank

question 36

Multiple Choice

Sarah has a checking account at First Bank.Orrin steals one of her blank checks, writes a check for $250, and then forges Sarah's signature.He then presents the check to First Bank for payment.First Bank pays the forged instrument.Which of the following statements is correct?

• A)First Bank will have to recredit the $250 to Sarah's account, but they can collect from Orrin if they can find him and he has the money.
• B)First Bank will have to recredit the $250 to Sarah's account, but only if they can collect the $250 from Orrin..
• C)Sarah is primarily liable on the check even if she did not sign it and was not negligent in allowing Orrin to take ^{the blank check.}
• D)None of these.

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Definitions:

Necessities

Basic needs essential for maintaining life, such as food, water, shelter, and clothing, which take precedence over other types of spending.

Elasticity Coefficient

A measure used to show the responsiveness of the quantity demanded or supplied to a change in one of its determinants, like price or income.

Supply

A schedule or curve that shows the various amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specified period of time.

Elastic

A characteristic of a good or service indicating that its quantity demanded or supplied changes significantly when there is a change in price.