Chapter 10 & 11 Review

For what purpose was the First Bank of the United States created?

• issue a national currency and take over state banks

• lend gold and silver to the state banks to back their currencies

• promote financial policies that favored merchants over farmers

• issue a national currency, control the money supply, and lend money

From 1836 to 1863, there was no national oversight of banking. What was the result?

• financial panics and economic instability

• prosperity for people who invested in state banks

• mergers between state banks

• stricter controls of banking by states

What did the National Banking Act of 1863 set up?

• adoption of the gold standard for the country

• stricter oversight of requirements for state banks

• guidelines for the currency issued by state banks

• a system of national banks and a national currency

What is the purpose of the Federal Reserve System?

• to make loans to banks, issue currency, and regulate the money supply

• to store the gold and silver reserves that back U.S. currency

• to provide federal insurance to safeguard the deposits in banks

• to deregulate banks and savings and loans institutions

The two original purposes of savings and loans were to take savings deposits and provide

• education loans

• business loans

• car loans

• home mortgage loans

A mortgage allows a consumer to

• buy goods with a card that immediately deducts the payment from an account

• store money in a bank for a set number of years

• purchase a house without paying the whole value up front

• store important papers in a locked box in the bank's vault

A major result of bank deregulation in the 1980s and 1990s was hundreds of

• bank failures

• new startup banks

• bank mergers

• large banks splitting up

Automatic teller machines let customers

• safely store valuables at locations other than the bank

• deposit and withdraw funds at locations other than the bank

• apply for loans at locations other than the bank

• open accounts at locations other than the bank

The difference between credit cards and debit cards is that

• credit cards are loans, while debit cards are withdrawals of existing funds

• debit cards are loans, while credit cards are withdrawals of existing funds

• credit cards are loans from checking, while debit cards are deposits

• debit cards are loans from checking, while credit cards are loans from savings

The term electronic banking generally refers to the use of

• self-banking kiosks located in the bank building

• ATMs to do complex bank transactions like loans

• currency exchanges to do bank transactions at remote locations

• the Internet and computers to do bank transactions at home