A Promise Made by a Bank to Pay a Payee

question 16

Multiple Choice

A promise made by a bank to pay a payee a certain amount of money at a future time is called a ________.

• A)note
• B)draft
• C)novation
• D)check
• E)certificate of deposit

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Definitions:

Government Expenditures

Total spending by the government on goods, services, and public projects, including salaries of public servants, social programs, and infrastructure projects.

Distortions

Refers to alterations or imperfections in economic market conditions that lead to inefficient resource allocation and outcomes.

Consumption

Spending by households on goods and services, with the exception of purchases of new housing.

Money Balances

The total amount of money held by individuals or entities in the form of cash or bank deposits.