july in multiplex

Topics: Federal Reserve System, Monetary policy, Central bank Pages: 8 (2395 words) Published: September 28, 2014
Chapter 19
Money, Prices, and Finance in the Postbellum Era

General Questions
*1. Between the Civil War and World War I, the U.S. monetary system a. experienced a persistent deflation.
b. suffered several financial crises in which banks closed and firms went bankrupt. c. adopted a de facto gold standard.
d. adopted a central bank.
e. All of the above.
ANSWER: e. All of the above.

2. Following the Civil War, U.S. forms of money included all of the following except: a. wooden nickels.
b. checks.
c. state bank notes.
d. greenbacks.
ANSWER: a. wooden nickels.

3. The "greenback"
a.provided a uniform currency across the U.S.
b.provided additional revenue for the government during the Civil War. c.supplied monetary increases that sent prices skyrocketing. d.All of the above are correct.
e.Only a and b are correct.
ANSWER: d.All of the above are correct.

4. Most of the increase in total money supply between 1860 and 1920 was due to a.an increase in national bank notes.
b.the growth of bank deposits.
c.an increase in greenbacks.
d.new discoveries of gold and silver.
ANSWER: b. the growth of bank deposits.

*5. Republicans in Congress pushed for the passage of the National Bank Act of 1863 because a. they wanted the executive branch to have more control over the amount of notes in circulation. b. they wanted to encourage a mild inflation in the U.S.

c. they felt that the Act would reduce the temptation for weak administrations to over issue paper currency. d. they wanted to reduce the number of banks in the U.S.
ANSWER: c. they felt that the Act would reduce the temptation for weak administrations to over issue paper currency.

6. Provisions of the National Bank Act of 1863 included all of the following except a.mandated legal reserve requirements for banks chartered under the Act. b.the requirement that banks chartered under the Act purchase a certain amount of US government bonds. c.the creation of a currency with a standard design.

d.the creation of a central bank responsible for serving as a lender of last resort and an overseer of the money supply. ANSWER: d. the creation of a central bank responsible for serving as a lender of last resort and an overseer of the money supply.

7. In 1865, Congress raised the tax on state bank notes to 10 percent of the value of notes in circulation. This tax a. ended the dual banking system in the U.S.
b. was less than the tax on national bank notes.
c. was rescinded in 1870.
d. was avoided through the use of demand deposits.
ANSWER: d. was avoided through the use of demand deposits.

*8. In 1865, Congress raised the tax on state bank notes to 10 percent of the value of notes in circulation. Quantitative evidence shows that by 1900, a. state banks had ceased to exist.
b. the number of state banks had declined dramatically.
c. the number of state banks had increased dramatically.
d. the number of state banks was roughly the same as in 1865. ANSWER: c. the number of state banks had increased dramatically.

9. It has been argued that banks tended not to take full advantage of issuing notes, thereby passing up potential profits because a.the profit amounts were small.
b.they were not the types of profits conservative bankers wanted to pursue. c.regulations and opportunity costs involved with the issuance itself limited the profits. d.All of the above are correct.

e.Only a and c are correct.
ANSWER: d.All of the above are correct.

10. Market barriers imposed on national banks
a.included both restrictions on mortgages and high capital requirements. b.allowed rural banks to charge higher rates.
c.allowed national banks to price discriminate.
d.All of the above are correct.
e. Only a and b are correct.
ANSWER: e. Only a and b are correct.

11. Which of the following statements most accurately describes the role of banks in the United States between the Civil War and WWI? a. The U.S., which had...
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