| A | B |
|---|
| The following are example of capital projects | buying ships to handle overseas transportation of goods, installing a new computer and network system, and purchasing a company that competes with your company |
| The major portion of transacting business involves | credit |
| The following situations can cause an increased interest rate are | high risk associated with a loan, inflation is increasing and political uncertainty |
| The value of a country's currency would be increased by | lower inflation |
| Methods of short term financing include | accounts payable and receivable |
| Building a new hospital in Katy, TX is an example of a | capital project |
| When money is deposited in a bank for future use, it is being used as a | store of value |
| Offering the advantage of prompt payment, this method involves a bank being instructed to transfer payment of merchandise to the bank of the exporter, after receiving imported goods | electronic funds transfer |
| This method of payment involves the creation of a document that states a promise to pay a set amount by a certain date | promissory note |
| Using coins, currency or checks for payment of goods and services are examples of using money as a | medium of exchange |
| This purpose of money makes it possible to compare prices for different items to help with making wise spending decisions | measure of value |
| A payment method that involves a financial document issued by a bank for an importer in which the bank guarantees payment is | letter of credit |
| An insurance certificate explains the amount of insurance coverage for fire, theft, water, or other damage that may occur to goods in shipment | True |
| The cost of borrowing someone else's money is called interest | True |
| Foreign exchange market | network of banks and financial institutions that buy and sell different currencies |
| Currency future | contract that allows a buyer the option to purchase foreign currency sometime in the future at today's rate |
| Balance of payments | measure of total flow of money coming into a country minus the total flow going out |
| Interest rate | the cost of borrowing someone else's money |
| Money | anything people will accept for the exchange of goods and services |
| Anything people will accept for the exchange of goods and services is called buying on account | False |
| Soft currency is a monetary unit that is freely converted into other currencies | False |
| A bond is used when a company needs to | borrow money over a long period of time |
| A document prepared by an exporter that includes details about the buyer, seller, merchandise, amounts, prices, shipping method, date of shipment, terms of payment is | commercial invoice |
| Shells were used as money once but would not work well as money because | it would be difficult to persuade anyone to accept them as money, they are not scarce and they are fragile |
| Floating exchange rate is a system in which currency values are based on supply and demand | True |
