Counterfeit Money and Banking Terms
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Counterfeit Money and Banking Terms

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Questions and Answers

What was the denomination of the fake bill dispensed in gumball machines in the 1970s?

  • FIVE DOLLARS
  • TWE DOLLARS (correct)
  • TWO DOLLARS
  • TWENTY DOLLARS

    • What was the altered name of the country on the fake bill?

  • The United States of Anarchy
  • The United States of Anemia (correct)
  • The Untied States of America
  • The Untied Kingdom

    • What must you do to cash a check that has been issued to you?

  • Deposit it immediately
  • Endorse it by signing on the front
  • Endorse it by signing on the back (correct)
  • Present additional identification

    • What is a stale check?

    <p>A check that is outstanding for six months or more</p> Signup and view all the answers

    What is the meaning of 'change' in a financial transaction?

    <p>Money that is returned when too much is tendered</p> Signup and view all the answers

    Which of the following best describes a credit card?

    <p>A card used for purchasing goods and services with a credit limit</p> Signup and view all the answers

    What is a 'bad cheque'?

    <p>A check written for an amount that exceeds the balance</p> Signup and view all the answers

    Which term refers to payment in goods or services rather than cash?

    <p>Barter Payments</p> Signup and view all the answers

    What term describes the time between the deposit of a check and its payment?

    <p>Float</p> Signup and view all the answers

    Which of the following best defines money hoarding?

    <p>Accumulation of money due to risk aversion</p> Signup and view all the answers

    What does it mean to overdraw an account?

    <p>Taking out funds beyond the available balance</p> Signup and view all the answers

    What is an overdraft?

    <p>A situation where funds are insufficient for a payment</p> Signup and view all the answers

    What does 'floating' refer to in financial terms?

    <p>The time checks remain unprocessed after deposit</p> Signup and view all the answers

    Which of these scenarios exemplifies hoarding behavior?

    <p>Saving money in a piggy bank without plans to spend</p> Signup and view all the answers

    If someone is 'banking with' a certain institution, what does this imply?

    <p>They are utilizing the services of that bank</p> Signup and view all the answers

    When a bond pays interest in kind (PIK), what does this imply?

    <p>Interest is paid using goods or services</p> Signup and view all the answers

    What is the main function of an Export Credit Agency (ECA)?

    <p>To provide government-backed loans and insurance to support home country companies</p> Signup and view all the answers

    What does 'frozen credit markets' mean for consumers?

    <p>Difficulty obtaining loans even with good credit history</p> Signup and view all the answers

    Who typically benefits from microcredit?

    <p>Poor entrepreneurs and unemployed individuals without a credit history</p> Signup and view all the answers

    What defines revolving credit?

    <p>It allows for continuous borrowing up to a certain limit without set payment terms</p> Signup and view all the answers

    What is a secured loan?

    <p>A loan where the borrower provides an asset as collateral</p> Signup and view all the answers

    What happens if a borrower defaults on a secured loan?

    <p>The creditor can take possession of the collateral</p> Signup and view all the answers

    What are bridge loans typically used for?

    <p>Buying a new home before selling an existing one</p> Signup and view all the answers

    Which option best describes trade credit insurance?

    <p>Protection against losses from non-payment of commercial debts</p> Signup and view all the answers

    What does it mean for a debtor to default?

    <p>The debtor has not paid a debt.</p> Signup and view all the answers

    Which term describes a situation where a debtor is unable to pay their debts?

    <p>Insolvency</p> Signup and view all the answers

    What is the purpose of the foreclosure process?

    <p>To recover amounts owed on a defaulted loan.</p> Signup and view all the answers

    What is typically contained in an IOU?

    <p>A note acknowledging personal debt.</p> Signup and view all the answers

    Which of the following describes accrued interest?

    <p>Interest that is not paid immediately but is added to the loan.</p> Signup and view all the answers

    What characterizes a variable-rate loan?

    <p>The interest rate fluctuates based on a base interest rate.</p> Signup and view all the answers

    Which agency is typically associated with threatening behavior in payment collection?

    <p>Debt collection agencies</p> Signup and view all the answers

    What happens when a lender files a public default notice?

    <p>The foreclosure process is initiated.</p> Signup and view all the answers

    What is deferred interest?

    <p>Interest that has accrued but not been paid</p> Signup and view all the answers

    What distinguishes a fixed interest rate loan?

    <p>The interest rate remains constant during the loan period</p> Signup and view all the answers

    What is a characteristic of installment credit?

    <p>It has a fixed number of payments</p> Signup and view all the answers

    What is the role of Freddie Mac?

    <p>To purchase and pool mortgages for investors</p> Signup and view all the answers

    What does the term 'indebtedness' refer to?

    <p>An obligation to pay money to another party</p> Signup and view all the answers

    Why is the secondary mortgage market important?

    <p>It increases the supply of money available for mortgages</p> Signup and view all the answers

    How often does deferred interest typically accrue?

    <p>Monthly, up to the previous month end</p> Signup and view all the answers

    Which type of loan does not have a fixed number of payments?

    <p>Revolving credit</p> Signup and view all the answers

    Study Notes

    Counterfeit Money

    • In the 1970s, a fake "TWE DOLLARS" bill was circulated in gumball machines.
    • The counterfeit bill was designed to resemble a real twenty-dollar bill with a portrait of Andrew Jackson.
    • The fake bill labeled the country as "The Untied States of Anemia."

    Banking

    • Payment in kind: Paying for goods or services with something other than cash.
    • Endorsement: Signing the back of a check before cashing it.
    • Bad/Bouncing check: A check returned unpaid due to insufficient funds in the account.
    • Stale check: A check that is over six months old; banks are not obligated to pay it.
    • Change: The balance of money received when the amount paid exceeds the amount due.
    • Coin: A piece of metal used as currency.
    • Credit card: A plastic card used for purchases with a pre-determined credit limit.
    • Float: The time checks are in transit between deposit and payment.
    • Hoard money: Accumulating money to hold rather than spend or invest.
    • Lodge/Deposit money: Placing money into a bank account.
    • Open an account: Begin a new bank account.
    • Bank with: Use a particular bank for personal finances.
    • Overdraft: Spending more money than is currently available in your account.
    • Overdraw: Spending more money than is available in your account.
    • Export/Import credit: Loans, guarantees, and insurance provided to support companies involved in exporting and importing goods.
    • Frozen credit: Difficult or impossible to obtain loans due to a lack of available lending.
    • Microcredit: Small loans extended to low-income individuals or those without established credit.
    • Revolving credit: A credit line with a varying available balance, such as credit cards.
    • Secured loan: A loan backed by an asset (collateral) which can be claimed by the lender if the borrower defaults.
    • Unsecured loan: A loan not backed by an asset, often with higher interest rates.
    • Service a debt: Make payments toward a debt.
    • Debt collection: The process of recovering unpaid debts.
    • Debtor: A person who owes money.
    • Defaulter: A person who fails to pay back a loan.
    • Foreclosure: A process allowing a lender to recover the amount owed on a defaulted loan by selling or taking possession of the property securing the loan.
    • IOU ( I owe you): A written acknowledgment of a debt typically used among acquaintances.
    • Accrued interest: Interest that has accumulated but not yet been paid.
    • Increase/Reduce interest rate: Increasing/Decreasing the interest rate on a loan.
    • Deferred/Outstanding interest: Unpaid interest accumulated on a loan.
    • Fixed interest: A loan with an interest rate that does not change during the fixed period.
    • Indebtedness: Existing debt.
    • Installment: A fixed regular payment toward a debt.
    • Lender: A person or institution that provides a loan.
    • Loan: A sum of money borrowed with an agreement to repay with interest.

    Home Loan/Real Estate Loan:

    • Freddie Mac (Federal Home Loan Mortgage Corporation): A government-sponsored enterprise created in 1970 to expand the secondary mortgage market in the United States.
    • The secondary mortgage market involves buying existing mortgages, pooling them, and selling them as mortgage-backed securities.
    • Freddie Mac's activities increase money available for new home purchases.

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    Description

    Explore the intriguing world of counterfeit money from the 1970s, including the fake 'TWE DOLLARS' bill that circulated in gumball machines. Test your knowledge on various banking terms and concepts such as payment in kind, endorsements, and bounced checks.

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