Prior to the creation of the Federal Reserve System,the money supply
A)Was very stable and highly valued
B)Was comprised of currency printed by the Department of the Treasury
C)Was produced by local banks and often traded at a discount
D)Was available only to bank depositors
E)Was comprised of gold

Question

Quizplus · Accepted Answer

Prior to the creation of the Federal Reserve System, the money supply was produced by local banks through the creation of banknotes, which were often traded at a discount. This system was prone to banking panics and instability. Currency was also printed by the Department of the Treasury, but this made up a smaller portion of the overall money supply. Gold did play a role in the monetary system, as the US dollar was convertible to gold at a fixed rate, but it was not the sole basis for the money supply.

Prior to the Creation of the Federal Reserve System,the Money