Dru Signs a Check "Pay to the Order of Eppie

question 33

Multiple Choice

Dru signs a check "pay to the order of Eppie" drawn on Dru's account in First State Bank. Greta forges Eppie's indorsement. First State pays the check. Most likely

• A) Dru will be liable for the amount.
• B) Eppie will have to pay Dru for the amount.
• C) First State will have to recredit Dru's account.
• D) the Federal Reserve will reimburse all parties for their costs.

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Definitions:

Explicit Costs

Direct, out-of-pocket expenses incurred in the operation of a business or the execution of a transaction.

Production

The process or method of creating goods and services through the combination of labor, materials, and technology.

Fixed Inputs

Resources in production that remain constant in quantity regardless of the level of output or activity.

Variable Inputs

Resources used in production that vary with the level of output, such as raw materials.