Question 1

Gresham 's Law

Accepted Answer

A)  applies only to bimetalism issues. 
B)  applies only to monetary issues in general. 
C)  applies to a wide variety of situations. 
D)  is only understood after taking graduate-level courses. 
A)  applies only to bimetalism issues. 
B)  applies only to monetary issues in general. 
C)  applies to a wide variety of situations. 
D)  is only understood after taking graduate-level courses.

Question 2

If the market ratio of silver to gold is 16 to 1 and the mint ratio is 15 to 1,

Accepted Answer

A)  people will cease to use gold and silver as money. 
B)  the Treasury will be forced to issue paper money. 
C)  gold is undervalued at the mint. 
D)  silver is undervalued at the mint. 
A)  people will cease to use gold and silver as money. 
B)  the Treasury will be forced to issue paper money. 
C)  gold is undervalued at the mint. 
D)  silver is undervalued at the mint.

Question 3

The charter of the Bank of the United States was not renewed in 1811 in part because

Accepted Answer

A)  Thomas Jefferson, who was president at the time, believed it to be unconstitutional. 
B)  of years of general instability in the value of currency. 
C)  of instability and uncertainty in the expansion of credit. 
D)  of fears of foreign ownership and manipulation. 
A)  Thomas Jefferson, who was president at the time, believed it to be unconstitutional. 
B)  of years of general instability in the value of currency. 
C)  of instability and uncertainty in the expansion of credit. 
D)  of fears of foreign ownership and manipulation.

Question 4

What was not one of the primary reasons why people opposed the First and Second Banks of the United States?

Accepted Answer

A)  They printed too much money and triggered a substantial inflation. 
B)  They had monopoly control over some banking activities. 
C)  They were unconstitutional. 
D)  They did not provide sufficiently generous lending policies. 
A)  They printed too much money and triggered a substantial inflation. 
B)  They had monopoly control over some banking activities. 
C)  They were unconstitutional. 
D)  They did not provide sufficiently generous lending policies.

Question 5

What is typically not considered a characteristic of a central bank?

Accepted Answer

A)  The bank backs its currency with gold or silver. 
B)  The bank has considerable control over the stock of money and uses this control to moderate fluctuations in credit conditions and prices. 
C)  The bank regulates other banks. 
D)  The bank lends a lot of money to the government. 
E)  The bank serves as a lender of last resort to other banks by lending them money when no one else will. 
A)  The bank backs its currency with gold or silver. 
B)  The bank has considerable control over the stock of money and uses this control to moderate fluctuations in credit conditions and prices. 
C)  The bank regulates other banks. 
D)  The bank lends a lot of money to the government. 
E)  The bank serves as a lender of last resort to other banks by lending them money when no one else will.

Question 6

Under the bimetallic standard of the 19th century

Accepted Answer

A)  the amount of money in circulation increased. 
B)  the American dollar served poorly as a unit of account. 
C)  only one metal tended to circulate as money at any given time. 
D)  the government earned profits by selling gold. 
A)  the amount of money in circulation increased. 
B)  the American dollar served poorly as a unit of account. 
C)  only one metal tended to circulate as money at any given time. 
D)  the government earned profits by selling gold.

Question 7

How did several banks try to trick bank commissioners into convincing them of their sufficient reserves?

Accepted Answer

A)  by "cooking the books." 
B)  by closing their doors, insisting on the state's bank holiday. 
C)  by moving the same specie reserve from one bank to another with a speedy sleigh. 
D)  by counterfeiting their own specie reserves. 
E)  All of the above. 
A)  by "cooking the books." 
B)  by closing their doors, insisting on the state's bank holiday. 
C)  by moving the same specie reserve from one bank to another with a speedy sleigh. 
D)  by counterfeiting their own specie reserves. 
E)  All of the above.

Question 8

Thomas Jefferson argued that the U.S. should adopt the Spanish dollar as the official unit of account because

Accepted Answer

A)  so many colonists came from Spanish-speaking nations. 
B)  it was based on the decimal system. 
C)  it was less prone to inflation than other units of account. 
D)  it was the unit of account used in most European countries. 
A)  so many colonists came from Spanish-speaking nations. 
B)  it was based on the decimal system. 
C)  it was less prone to inflation than other units of account. 
D)  it was the unit of account used in most European countries.

Question 9

Actions by the Second Bank of the United States

Accepted Answer

A)  reduced the discount rate on state bank notes. 
B)  increased the discount rate on state bank notes. 
C)  created inflation. 
D)  effectively ended the use of state bank notes. 
A)  reduced the discount rate on state bank notes. 
B)  increased the discount rate on state bank notes. 
C)  created inflation. 
D)  effectively ended the use of state bank notes.

Question 10

According to Gresham's Law,

Accepted Answer

A)  inflation and unemployment are inversely related. 
B)  tax rates and tax revenues are inversely related. 
C)  bad money drives out good money. 
D)  inflation is inevitable in the long run. 
A)  inflation and unemployment are inversely related. 
B)  tax rates and tax revenues are inversely related. 
C)  bad money drives out good money. 
D)  inflation is inevitable in the long run.

Question 11

Rolnick and Weber point out that a bimetallic standard will not exhibit Gresham's Law if

Accepted Answer

A)  people are willing to use coins at their market values. 
B)  people are willing to use coins at their face values. 
C)  the government regulates the quantity of each type of coin in circulation. 
D)  paper money circulates along with minted coins. 
A)  people are willing to use coins at their market values. 
B)  people are willing to use coins at their face values. 
C)  the government regulates the quantity of each type of coin in circulation. 
D)  paper money circulates along with minted coins.

Question 12

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. 
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 13

Which was not a result of the California gold rush?

Accepted Answer

A)  A substantial increase in the money supply. 
B)  A large increase in GNP. 
C)  A significant decrease in the prices of farm goods. 
D)  A decline in the inequality of wealth 
A)  A substantial increase in the money supply. 
B)  A large increase in GNP. 
C)  A significant decrease in the prices of farm goods. 
D)  A decline in the inequality of wealth

Question 14

States that developed successful and sound commercial banking systems in the antebellum period included all of the following except

Accepted Answer

A)  New York . 
B)  Ohio . 
C)  Michigan . 
D)  Louisiana . 
A)  New York . 
B)  Ohio . 
C)  Michigan . 
D)  Louisiana .

Question 15

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. 
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 16

State bank notes usually had a face value that was ______ their market value, while the notes of the First Bank of the U.S. usually had a face value that was ______ their market value.

Accepted Answer

A)  greater than; less than 
B)  less than; greater than 
C)  equal to; less than 
D)  greater than; equal to 
A)  greater than; less than 
B)  less than; greater than 
C)  equal to; less than 
D)  greater than; equal to

Question 17

The Coinage Act of 1792

Accepted Answer

A)  designated both gold and silver as the monetary standard for the U.S. 
B)  designated gold as the monetary standard for the U.S. 
C)  designated silver as the monetary standard for the U.S. 
D)  designated paper Treasury notes as the monetary standard for the U.S. 
A)  designated both gold and silver as the monetary standard for the U.S. 
B)  designated gold as the monetary standard for the U.S. 
C)  designated silver as the monetary standard for the U.S. 
D)  designated paper Treasury notes as the monetary standard for the U.S.

Question 18

In his Report on a National Bank , _________________ argued in favor of the establishment of a Bank of the United States.

Accepted Answer

A)  Thomas Jefferson 
B)  Alexander Hamilton 
C)  George Washington 
D)  Benjamin Franklin 
A)  Thomas Jefferson 
B)  Alexander Hamilton 
C)  George Washington 
D)  Benjamin Franklin

Question 19

__________________ was a vocally and actively opposed the re-chartering of the Second Bank of the United States.

Accepted Answer

A)  Nicholas Biddle 
B)  Henry Clay 
C)  Andrew Jackson 
D)  Alexander Hamilton 
A)  Nicholas Biddle 
B)  Henry Clay 
C)  Andrew Jackson 
D)  Alexander Hamilton

Question 20

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. 
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.

Exam 12: Money and Banking in the Developing Economy

Gresham 's Law

If the market ratio of silver to gold is 16 to 1 and the mint ratio is 15 to 1,

The charter of the Bank of the United States was not renewed in 1811 in part because

What was not one of the primary reasons why people opposed the First and Second Banks of the United States?

What is typically not considered a characteristic of a central bank?

Under the bimetallic standard of the 19th century

How did several banks try to trick bank commissioners into convincing them of their sufficient reserves?

Thomas Jefferson argued that the U.S. should adopt the Spanish dollar as the official unit of account because

Actions by the Second Bank of the United States

According to Gresham's Law,

Rolnick and Weber point out that a bimetallic standard will not exhibit Gresham's Law if

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

Which was not a result of the California gold rush?

States that developed successful and sound commercial banking systems in the antebellum period included all of the following except

Near the end of the eighteenth century, the dollar

State bank notes usually had a face value that was ______ their market value, while the notes of the First Bank of the U.S. usually had a face value that was ______ their market value.

The Coinage Act of 1792

In his Report on a National Bank , _________________ argued in favor of the establishment of a Bank of the United States.

__________________ was a vocally and actively opposed the re-chartering of the Second Bank of the United States.

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

Growth, Welfare, and the American Economy

Founding the Colonies

Colonial Economic Activities

The Economic Relations of the Colonies

Economic Progress and Wealth

Three Crises and Revolt

Hard Realities for a New Nation

Land and the Early Westward Movements

Transportation and Market Growth

Market Expansion and Industry in First Transition

Labor During the Early Industrial Period

The Entrenchment of Slavery and Regional Conflict

War, Recovery, and Regional Divergence

Agricultures Western Advance

Railroads and Economic Change

Industrial Expansion and Concentration

The Emergence of Americas Labor Consciousness

Money, Prices, and Finance in the Postbellum Era

Commerce at Home and Abroad

World War I, 1914-1918

The Roaring Twenties

The Great Depression

The New Deal

World War Ii

The Changing Role of the Federal Government

The Changing Role of the Federal Government: Consumer Safety, Agriculture, the Environment, and Housing

Monetary Policy, Fiscal Policy, and the Business Cycle After World War Ii

Manufacturing, Productivity, and Labor

Achievements of the Past, Challenges for the Future

Filters

Under the bimetallic standard of the 19^th century

State bank notes usually had a face value that was their market value, while the notes of the First Bank of the U.S. usually had a face value that was their market value.