Because of the National Banking Act, the volume of national bank notes depends on the government bond market rather than the seasonal or cyclical needs of the nation for currency.

Question

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The National Banking Act tied the issuance of national bank notes to the amount of government bonds held by the bank, rather than the bank's fiduciary needs. This set the volume of national bank notes based on the government bond market rather than the seasonal or cyclical needs of the nation for currency.

Because of the National Banking Act, the Volume of National