If the Maker of a Promissory Note Fails to Pay

question 148

Multiple Choice

If the maker of a promissory note fails to pay the note on the due date, the note is said to be

• A) displaced
• B) disallowed
• C) dishonored
• D) discounted

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Definitions:

Legal Reserve Requirements

Guidelines enforced by central banks on the minimal reserves that banks should maintain in relation to their deposits.

Destroyed Money

The process of physically eliminating money from circulation, typically by central banks, to manage a currency's supply.

Check Clearing

The process by which banks settle transactions by transferring money from the check writer's account to the recipient's account.

Federal Funds Rate

The interest rate at which banks lend reserve balances to other banks overnight, on an uncollateralized basis.