78 #
© 2014 Pearson Canada Inc.#
An electronic payments system has not completely replaced the paper payments system
because of all of the following reasons except ____.
A) expensive equipment is necessary to set up the system
B) security concerns
C) privacy concerns
D) transportation costs
Answer: D
Diff: 1 Type: MC Page Ref: 52
Skill: Recall
Objective List: 3.3 Show understanding of payments system and illustrate how information
technology has paved the way for e-money, e-banking, and e-commerce
In explaining the evolution of money, ____.
A) government regulation is the most important factor
B) commodity money, because it is valued more highly, tends to drive out paper money
C) new forms of money evolve to lower transaction costs
D) paper money is always backed by gold and therefore more desirable than cheques
Answer: C
Diff: 2 Type: MC Page Ref: 52
Skill: Applied
Objective List: 3.3 Show understanding of payments system and illustrate how information
technology has paved the way for e-money, e-banking, and e-commerce
What factors have slowed down the movement to a system where all payments are made
electronically?
Answer: The equipment necessary to set up the system is expensive, security of the information,
and privacy concerns are issues that need to be addressed before an electronic payments system
will be widely accepted.
Diff: 1 Type: SA Page Ref: 52
Skill: Recall
Objective List: 3.3 Show understanding of payments system and illustrate how information
technology has paved the way for e-money, e-banking, and e-commerce
What is a cheque? what are their advantages and disadvantages?
Answer: A cheque is an instrument used to transfer money from your account to someone else's
account when she deposits the cheque.
Advantages: Reduces transportation costs associated with the payments system as they
frequently cancel each other. Also, they make the transactions for large amounts much easier as
they can be written for any amount up to the balance in the account. Finally loss from theft is
greatly reduced and they provide convenient receipts for purchases.
Disadvantages: It takes time to get cheques from one place to another, it takes several days for a
cheque to be processed from your bank, and the paper work required to process them is costly.
Diff: 1 Type: SA Page Ref: 48
Skill: Recall
Objective List: 3.3 Show understanding of payments system and illustrate how information
technology has paved the way for e-money, e-banking, and e-commerce