Which of the Following Is Most True Regarding Checks Whose

question 30

Multiple Choice

Which of the following is most true regarding checks whose amount has been altered?

• A) The bank may not pay such checks as altered in all cases.
• B) The bank may pay such checks as altered where the alteration is due to the customer's negligence and the alteration is not obvious.
• C) The bank must pay such checks as originally drawn.
• D) The bank cannot ever pay such checks.

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Definitions:

Demand-side Market Failure

A situation where the quantity of a product demanded by consumers does not equate to the quantity supplied by producers due to externalities or imperfect information, leading to an inefficient allocation of resources.

Efficient Amount

The quantity of a good or service that maximizes social welfare, taking into account all costs and benefits.

Free-rider Problem

A situation in which individuals or entities benefit from resources, goods, or services without paying for them, leading to underprovision of those goods.

Public Good

A product or service that is available for all to consume, regardless of who pays for it, characterized by non-excludability and non-rivalry.