Question 1

Discuss the banking crisis management techniques of Pierpont Morgan.Integrate Davis' (1963)thesis in identifying why Morgan,a private individual,was involved in bank management crisis.?Why did the Federal Reserve System initially adopt some form of his techniques?

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Question 2

What is the Federal Reserve System? What are its current functions?

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Question 3

Describe the differences between the ways U.S.and British industrialists could seek capital funding.How did these differences produce different financial developments and patterns of industrialization in these countries?

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Question 4

Revisit the Quantity Theory of Money from Chapter 3.Identify the relationship between an increase in the supply of money and inflation.

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Question 5

Describe the Populist movement and explain why supporters wanted the federal government to assume responsibility for economic welfare in the form of public education,low unemployment,?and abolishing a national banking system.

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Question 6

Populists proved themselves to be strong "quantity theory" activists by

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The quantity theory of money holds that the price level in an economy is directly proportional to the amount of money in circulation. Populists believed that a general level of money demand should be provided by the government to keep pace with farm output, which would help stabilize prices and prevent inflation. This shows their advocacy for the quantity theory of money. Options B, C, and D relate to other objectives of the Populist movement but do not directly demonstrate their support for the quantity theory of money.

Question 7

Discuss the risks of using paper money to provide an adequate supply of money for the economy.Describe how a central bank,government regulation or coordinated actions by banks can help ?reduce these risks.

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Question 8

Which group opposed having lots of money in the economy after the Civil War and before ?World War I?

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Those providing credit, such as the wealthy and savers, generally opposed having lots of money in the economy because it could lead to inflation, which erodes the value of their savings and the fixed-income returns from loans they provide.

Question 9

Describe the disadvantages that unexpected inflation places on (i)people living on fixed incomes,?(ii)workers whose wages and salaries are set by contracts,and (iii)creditors.

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Question 10

Describe the concerns of private citizens over the ways in which local,state and federal governments,federally-chartered and state-chartered banks and the Bank of England attempted to maintain the stability of paper money at different times from 1700 to 1860.Chapter 12 complements Chapter 19?in providing information required to complete this essay.

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Question 11

Describe the economic and political debates over money from 1865 to 1933.

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Question 12

Identify the entities that want inflation and explain why they want it.

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Question 13

Investment banks specialize in

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Investment banks specialize in handling long-term securities such as stocks, bonds and other securities. They help companies and governments to raise capital by underwriting and selling securities to investors. Investment banks also provide advice on mergers and acquisitions, and often have trading desks that buy and sell securities for their own accounts or on behalf of clients.

Question 14

Explain why the Populists wanted the national banks to increase the stock of money by issuing greenbacks.Discuss their desire for inflation.

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Question 15

Subsidies for silver,the Bland-Allison Act of 1878,and the Silver Purchase Acts of 1890 and 1933 all provide examples of government programs

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All three examples involve government programs that reflect the political attractiveness of special-interest issues rather than being based on careful cost-benefit analysis or promoting the general welfare. The subsidies for silver were favored by western mining interests, the Bland-Allison Act was designed to appease silver-mining states and silver currency advocates, and the Silver Purchase Acts of 1890 and 1933 were attempts to prop up the silver market and protect the interests of silver producers.

Question 16

What is financial intermediation? Discuss how it contributes to economic growth.

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Question 17

The National Banking Acts of 1863 and 1864 attempted to make the national banking system seem stronger than the state banking system by all of the following EXCEPT:

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The National Banking Acts did not provide depository insurance; this feature was introduced much later, specifically with the creation of the Federal Deposit Insurance Corporation (FDIC) in 1933.

Question 18

Discuss the drive to regulated banking through the public sector and through the private sector.Chapter 12 complements Chapter 19 in providing information required to complete this essay.

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Question 19

Describe the developments in the national banking system from 1790 to 1863.

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Question 20

When interest rates rise,the price of bonds:

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When interest rates rise, the price of bonds decreases. This is because the higher interest rates provide investors with better opportunities for return on their investment, making existing bonds less desirable and causing their prices to drop.

Quiz 19: Financial Developments 1863–1914