Question

Institutions can make small transfers (like Soc. Sec. payments, corporate payments to vendors and payroll deposits) using

a) Federal Reserve Notes
b) Electronic funds transfer
c) Barter systems
d) Gold and silver coins

Answer 1

Institutions make small monetary transfers like Social Security payments and corporate transactions primarily through Electronic funds transfer (EFT), not through Federal Reserve Notes, barter systems, or gold and silver coins.

Step-by-step explanation:

The subject of the question relates to the methods through which institutions can make small transfers of money, such as Social Security payments and corporate transactions. Among the options provided, institutions typically use Electronic funds transfer (EFT) for these purposes. Federal Reserve Notes refer to the physical cash used for transactions, while barter systems involve trading goods or services without money changing hands. Gold and silver coins were historically used as currency but are not commonly used for everyday transactions in modern banking. The Federal Reserve does play a role in ensuring that currency and coins meet public demands, particularly during periods of high cash transactions, such as the Christmas season.