Deck 2: Development of the Us Banking System

Question 1

The National Banking Act of 1864 founded an adaptable, flexible system of central banking for the United States.

Answer 1

False

Question 2

The second Bank of the United States

A)was considered a great friend to state banks.
B)bowed to political pressure and made no attempt to regulate credit and the money supply.
C) was thought by Andrew Jackson to represent the advancement of the few at the expense of the many.
D) gained strength throughout the life of its first charter, eventually being granted a charter renewal in 1836.

Answer 2

C

Question 3

During the mortgage and credit crises, the government did not intervene to rescue financial institutions on the brink of failure.

Answer 3

False

Question 4

What was the most common medium of exchange in colonial America?

A)paper money
B)coins
C) checks
D) pieces of gold and silver

Question 5

A loosening of lending oversight standards contributed to the recent mortgage crisis.

Question 6

Check 21 allows

A)anyone over the age of 21 to obtain a checking account.
B)a discount on account servicing fees if more than 21 checks are written during the month.
C) funds to remain in an account until 21 days after the check is written.
D) using substitute checks to process checks electronically.

Question 7

In the absence of a national banking system, state banks grew in number and influence in the early years of the United States.

Question 8

Counterfeiting was not a problem when the government first began printing paper currency.

Question 9

Money is a medium of exchange for people to use to trade things of value.

Question 10

What causes stagflation?

A)a stagnant economy
B)high inflation
C) high unemployment
D) all of the above

Question 11

There was no form of paper currency in colonial America.

Question 12

The largest denomination of paper currency printed in the United States today is the

A)one hundred dollar note.
B)five hundred dollar note.
C) one thousand dollar note.
D) ten thousand dollar note.

Question 13

The largest denomination dollar note currently printed is the $100 note.

Question 14

A check is an example of bank currency.

Question 15

The Civil War in America brought monetary issues to a crisis point because

A)state banks began to lose influence.
B)rampant inflation threatened the entire economic system.
C) the counterfeiting of money became widespread.
D) all of the above.

Question 16

The National Currency Act of 1863 did all of the following EXCEPT

A)established the basic banking system in use today.
B)established standards for currency.
C) taxed state bank notes.
D) made the printing of state bank notes unprofitable.

Question 17

To combat inflation, the government may institute any of the following policies EXCEPT

A)tighten the money supply.
B)lower taxes.
C)
C) allow interest rates to rise.
D) a combination of a and

Question 18

The Emergency Banking Act of 1933

A)founded the system of central banking still used in the United States.
B)established a bank holiday that closed all banks in the country for one month.
C) expanded the monetary controls of the Federal Reserve.
D) separated commercial banking from investment banking to protect assets.

Question 19

The first Bank of the United States was a government institution.

Question 20

The National Banking Act of 1864 spelled the end of state banking systems in the United States.

Question 21

The U.S. government currently prints paper currency in seven different denominations, or amounts. If you had one bill of each of these seven denominations, how much money would you have?

Question 22

The National Banking Act of 1864 established the Office of the ____________________ of the Currency to issue charters to national banks.

Question 23

Before World War I in the United States, the term ____________________ currency meant the money the government printed, and nothing else.

Question 24

A decline in total production lasting a minimum of two consecutive quarters defines

A)stagflation.
B)a recession.
C) a mortgage crisis.
D) all of the above.

Question 25

On January 1, the cost of a product is $50. If inflation for that year is 12 percent, what does the product cost on December 31 of that year?

Question 26

When a stock is bought on ____________________, it is purchased for a fraction of its price and then resold at a profit without the full purchase price of the stock ever having been paid.

Question 27

A bank ____________________ occurs when many people try to withdraw their money from a bank at once.

Question 28

A collective rise in the supply of money, incomes, and prices is called ____________________.

Question 29

The original cost of a product is $75. Inflation for the first year is 8 percent; for the second year, inflation is 10 percent. What is the cost of the product at the end of the second year?

Question 30

How did Alexander Hamilton attempt to establish the federal government as the final authority for America's economic security?

Question 31

Angie's salary is $45,000. If inflation this year is 3 percent, what does Angie's salary need to be in order to hold the same purchasing value?

Question 32

Any bank that is part of the Federal Reserve System is called a(n) ____________________ bank.

Question 33

Give three examples of paper currency in use today.

Question 34

If you earn $24,000 per year and the inflation rate is 7% per year, how much would you have to earn next year to keep pace with inflation?

Question 35

____________________ is all media of exchange circulating in a country.

Question 36

What problem did the National Currency Act of 1863, later rewritten as the National Banking Act of 1864, address?

Question 37

During the 1970s the inflation rate was about ____________________ per year.

Question 38

____________________ quarters are coins that highlight special features in each state.

Question 39

The ____________________ Treasury System was a network of federal offices that handled U.S. government money in the years preceding the Civil War.

Question 40

What is deposit currency?

Question 41

What does the Federal Deposit Insurance Corporation do?

Question 42

In what year did the Great Depression begin?

Question 43

Briefly describe some of the causes of the recent mortgage crisis.

Question 44

Why did Franklin
D. Roosevelt declare a bank holiday in March 1933?

Question 45

When did the U.S. government begin to print paper currency? Where did American paper currency come from before then?

Question 46

Why did the first Bank of the United States fail?

Question 47

What is stagflation?

Question 48

Explain why Thomas Jefferson was opposed to the creation of a central bank.

Question 49

What effect did the Monetary Control Act of 1980 and the Garn-St Germain Depository Institution Act of 1982 have on banks?

Question 50

Explain how the successful economy of the 1920s helped cause the Great Depression of the 1930s.​