Which of the Following Statements Is TRUE with Respect to Bills

question 15

Multiple Choice

Which of the following statements is TRUE with respect to bills of exchange?

• A)A bill of exchange must be drawn upon a bank, a trust account, or some other financial institution.
• B)A bill of exchange is usually used only for relatively small domestic transactions.
• C)Once a bill of exchange is accepted, the drawer becomes known as the acceptor.
• D)Unlike a promissory note, a bill of exchange cannot be used to create a credit arrangement between the parties.
• E)Whereas a cheque must be drawn on a bank, a bill of exchange may be drawn on a bank or anyone else.

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Definitions:

Producer Surplus

Producer surplus is an economic measure of the difference between the amount a producer is paid for a good compared to the minimum amount they would accept to produce that good.

Market Price

is the current price at which an asset or service can be bought or sold in the open market.

Marginal Cost

The elevation in aggregate expenditure triggered by the output of one supplementary unit of a good or service.

Profit

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.