In a Promissory Note, the Party

question 57

Multiple Choice

In a promissory note, the party

• A)making the promise to pay is called the payee.
• B)who is paid is called the maker.
• C)making the promise to pay is called the recipient.
• D)who is paid is called the payee.

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Definitions:

Required Reserves

The minimum amount of funds that a bank must hold in reserve against deposit liabilities, as mandated by central banking authorities.

Open Market Sale

The selling of government bonds to the public or banks by the central bank to control the money supply.

Discount Rate

The interest rate charged by central banks on loans offered to commercial banks or the rate used to discount future cash flows to present value.

Required Reserve Ratios

These are central bank regulations set on the minimum amount of reserves that commercial banks must hold against deposits.