Question 1

President Jackson's reasons for vetoing the recharter the Second Bank of the United States did not include

Accepted Answer

A) fears that the bank was nearing insolvency. 
B) questions of constitutionality. 
C) concerns over foreign ownership. 
D) fears that the bank could undo democracy itself.

Question 2

Which of the following antebellum institutions acted most like a central bank?

Accepted Answer

A) The First Bank of the United States 
B) The Second Bank of the United States 
C) Banks created by the National Bank Act 
D) The U.S.Treasury

Question 3

Under the bimetallic standard of the 19th century,

Accepted Answer

A) gold was initially valued at about 15 times that of silver. 
B) price fluctuations of gold and silver eased the adoption of the system. 
C) price fluctuations caused hoarding of undervalued coins. 
D) Both a and b are correct. 
E) Both a and c are correct.

Question 4

All of the following are examples of state regulations on banks except:

Accepted Answer

A) the Suffolk System. 
B) the Safety Fund System. 
C) required bond deposits with a state authority prior to chartering. 
D) the Forstall System.

Question 5

Which of the following was not true of the First and Second Banks of the United States?

Accepted Answer

A) They had branches throughout the country. 
B) They issued paper money. 
C) They made loans to private individuals. 
D) They set the bimetallic ratio.

Question 6

Early attempts to establish paper money were hampered by

Accepted Answer

A) counterfeiting. 
B) Constitutional prohibition against states issuing paper money. 
C) currency valuations that varied from city to city. 
D) All of the above are correct. 
E) Only a and c are correct.

Question 7

Near the end of the eighteenth century,the dollar

Accepted Answer

A) was a nickname for the Spanish Peso. 
B) was more plentiful than any other coin. 
C) was customarily used to reckon accounts. 
D) All of the above are correct.

Question 8

The Coinage Act of 1792 set the relative values of silver and gold coins at 15 to 1.Suppose the relative values of silver and gold in the market was 14 to 1.In this case,

Accepted Answer

A) only silver would circulate as money. 
B) silver would be hoarded and sold abroad. 
C) silver would be overvalued at the mint. 
D) both gold and silver would circulate as money.

Question 9

Opponents of the First Bank of the U.S.argued that the bank

Accepted Answer

A) was unconstitutional. 
B) created a "money monopoly." 
C) favored northern manufacturing more than southern agriculture. 
D) opened the U.S.monetary system to foreign control. 
E) All of the above.

Question 10

In the term "Free Banking," the "free" means

Accepted Answer

A) the freedom of any state legislature to charter a bank. 
B) the freedom of banks to mint U.S.coins. 
C) the freedom of anyone to start a bank. 
D) None of the above are correct.

Question 11

All of the following means were used to reduce problems associated with the circulation of commercial bank notes except

Accepted Answer

A) a pledge by the Treasury to accept all bank notes issued by state-chartered banks. 
B) anticounterfeiting associations formed by commercial banks. 
C) bank note reporters and counterfeit detectors,such as Thompson's Reporter and Hodges' Bank Note Safeguard. 
D) note brokers who bought and sold commercial bank notes.

Exam 12: Money and Banking in the Developing Economy