L/C Eliminates Credit Risk If the Bank That Opens It

question 19

True/False

L/C eliminates credit risk if the bank that opens it is of good standing. It also increases the risk that payment will be delayed or withheld owing to exchange controls or other political acts.

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Definitions:

Velocity of Money

The rate at which money circulates in the economy, typically measured as the ratio of nominal GDP to the money supply, indicating the frequency of transactions.

Unemployment

The situation when individuals who are capable of working and are seeking work are unable to find employment.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, marked by high unemployment, failing banks, and deflation.

Trade Restrictions

Measures imposed by governments to control the exchange of goods and services across its borders, affecting international trade.