Instruments of Exchange

• What is a check?

  A check is a written, dated, and signed document that instructs a bank to make a payment
• How long does it typically take for a check to clear?

  Several days
• What happens if there are insufficient funds when a check is written?

  The check bounces
• Why do many businesses not accept checks?

  Some people misuse checks, leading to bounced checks
• What is a bill of exchange?

  A bill of exchange promises to pay funds at a later date
• When were the first bills of exchange written?

  More than 2,000 years ago
• How is a bill of exchange typically used in international trade?

  It is exchanged for goods at the port of arrival
• What is the primary difference between a debit card and a credit card?

  A debit card uses your own money, while a credit card uses the bank's money
• What happens when you use a credit card?

  You are borrowing money from the bank and may incur interest
• Why might credit cards be considered more secure than debit cards?

  Banks may reimburse you for fraudulent purchases on credit cards
• What is electronic transfer in banking?

  It uses a secure website and password for transferring funds
• What is telephone banking used for?

  To check account balances and transfer money
• How has the popularity of telephone banking changed over time?

  It is not as popular today as it was in the past
• What is e-commerce?

  Conducting any form of business online
• What are some examples of e-commerce platforms?

  Amazon and eBay
• What is a bank draft?

  A document stating an amount to be paid by the bank on behalf of a customer
• What is mobile money?

  A method of conducting transactions using mobile devices
• What is Apple Pay?

  A mobile payment service that allows users to pay using their phones
• How have payment instruments evolved since the barter system?

  We have developed various instruments of exchange, moving beyond simple barter
• What are the first two objectives discussed in the lecture?

  Describe the role of money and explain the development of the barter system
• What is the focus of objective 3 in the lecture?

  Identify the instruments of exchange
• What is a check?

  A check instructs a bank to make a payment
• How long does it typically take for a check to clear?

  Several days
• What happens if there are insufficient funds when a check is written?

  The check bounces
• Why do some businesses not accept checks?

  Some people misuse checks, leading to bounced checks
• What is a bill of exchange?

  A bill of exchange promises to pay funds at a later date
• In what context are bills of exchange often used?

  International trade
• How long ago were the first bills of exchange written?

  More than 2,000 years ago
• What is the purpose of a bill of exchange in trade?

  To exchange goods for payment upon arrival
• What is the primary difference between a debit card and a credit card?

  A debit card uses your own money, while a credit card uses the bank's money
• What happens when you use a credit card?

  You are borrowing money from the bank
• What is a potential security issue with debit cards?

  Access to your account can lead to loss of funds
• What is electronic transfer in banking?

  Transferring money electronically using secure websites
• What is telephone banking?

  A method of banking using a security code over the phone
• What can you do with electronic transfer systems?

  You can check account balances and transfer money
• What is e-commerce?

  Conducting any form of business online
• What are examples of e-commerce platforms?

  Amazon and eBay
• What is a bank draft?

  A document stating an amount to be paid by the bank on your behalf
• How do mobile payment systems work?

  They allow payments through scanning with a phone
• What are some examples of digital wallets?

  Apple Pay, Google Pay, and Samsung Pay