If Banks Closed and ATMs Limited Withdrawals to 3 a Week

question 283

Multiple Choice

If banks closed and ATMs limited withdrawals to 3 a week and no more than $100 per withdrawal, what would be the most likely result?

• A)A rapid growth in the economy as people began to trade more directly with each other.
• B)Governments would start to refuse payment of taxes in cash.
• C)Consumers would lose all incentive to hold cash.
• D)Businesses would start to demand payment in cash.
• E)Importers would make expanded use of credit.

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Definitions:

Financing Activities

Transactions and events where a company either raises funds through borrowing or repaying debt, or issuing and repurchasing its own shares, as seen in the cash flow statement.

Retained Earnings

The amount of net income retained in the corporation.

Cash Dividends

Distributions of profits by a company to its shareholders in the form of cash.

Investing Activities

Financial transactions related to the acquisition or disposal of long-term assets and other investments not included in cash equivalents.