When the Payee Is Concerned About the Quality of a Draft

question 266

True/False

When the payee is concerned about the quality of a draft, it may be submitted to the drawee for confirmation. That is called an acceptance or bankers' acceptance.

---

Definitions:

M1

A category of the money supply that includes all physical money like coins and currency, as well as demand deposits and other liquid assets held by the central bank.

Nonbanking Public

Individuals and businesses that are participants in the financial markets but do not have the authority to accept deposits or provide banking services.

Money Supply

Money supply is the total amount of monetary assets available in an economy at a specific time, including cash, coins, and balances held in checking and savings accounts.

Currency

The system of money in general use in a particular country.