A bit confusing but what I mean by this is say, a guy writes a 1000 dollar check (made out to cash)to buy a quad. The guy receiving the check, instead of cashing it out, uses the original check to then go buy his own quad and so on.
In: Economics
I don’t know if I (or most people) would ever pay that way. If you’re making it out to “cash”, then you should go and cash it yourself and pay him the money.
If you’re writing the check to that guy, put his name as the recipient.
Either way, if the guy is giving you the quad for the check, it doesn’t matter whether he cashes the check or uses it the way you described. At the end of the day, the check is useless unless there is money in the account when you go to cash it. I don’t see why people would just take it at face value.
The reason we just accept paper money is because it’s (theoretically) accepted by the government as legal currency. That’s why most people accept traveler’s checks as valid currency; the person had to pay cash up front for the value on the check.
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