Mishkin_TB_ch12.docVIP

The Economics of Money, Banking, and Financial Markets, 9e Mishkin Chapter 12 Banking Industry: Structure and Competition 12.1 Historical Development of the Banking System 1 The modern commercial banking system began in America when the A Bank of United States was chartered in New York in 1801. B Bank of North America was chartered in Philadelphia in 1782. C Bank of United States was chartered in Philadelphia in 1801. D Bank of North America was chartered in New York in 1782. Answer: B Ques Status: Previous Edition 2 A major controversy involving the banking industry in its early years was A whether banks should both accept deposits and make loans or whether these functions should be separated into different institutions. B whether the federal government or the states should charter banks. C what percent of deposits banks should hold as fractional reserves. D whether banks should be allowed to issue their own bank notes. Answer: B Ques Status: Previous Edition 3 The government institution that has responsibility for the amount of money and credit supplied in the economy as a whole is the A central bank. B commercial bank. C bank of settlement. D monetary fund. Answer: A Ques Status: Previous Edition 4 Because of the abuses by state banks and the clear need for a central bank to help the federal government raise funds during the War of 1812, Congress created the A Bank of United States in 1812. B Bank of North America in 1814. C Second Bank of the United States in 1816. D Second Bank of North America in 1815. Answer: C Ques Status: Previous Edition 5 The Second Bank of the United States was denied a new charter by A President Andrew Jackson. B Vice President John Calhoun. C President Benjamin Harrison. D President John Q. Adams. Answer: A Ques Status: Previous Edition 6 Currency circulated by banks that could be redeemed for gold was called ________. A junk bonds B banknotes C gold bills D state money Answer: B Ques Sta