A Bank Issues a Debit Memorandum

question 102

Multiple Choice

A bank issues a debit memorandum:

• A)To notify a depositor of an EFT.
• B)To notify a depositor of a deduction from a depositor's account.
• C)To notify a depositor of all increases to the depositor's account.
• D)To notify a depositor of an NSF cheque.
• E)To notify a depositor of a deduction from a depositor's account and to notify a depositor of an NSF cheque.

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Definitions:

Nominal Interest Rate

The interest rate before adjustments for inflation, reflecting the rate at which money can be borrowed or invested.

Real Interest Rate

The interest rate adjusted for inflation, more accurately reflecting the true cost of borrowing or the true yield on savings.

Deflation

A decrease in the general price level of goods and services in an economy over a period, opposite of inflation, often indicating a reduction in consumer demand and economic activity.

CPI

The Consumer Price Index, through a weighted average method, evaluates how the prices of a varied mix of consumer services and goods, such as medical care, food, and transportation, change over time.