Quiz 2 Flashcards
Modern Banking arose in_____in the late middle ages
Italy
_____ stored money or valuables for wealthy people and issued receipts that promised to return the property on demand
Italian merchants
______ is the practice of holding only a fraction of the money deposited in a bank and lending the rest
Fractional reserve banking
A ____ is a bank chartered by a state government
state bank
Hamilton was a leading federalist who believed in a ______
strong central government
______ argued that the constitution implied that the federal government had the authority to create a national bank to carry out its duty to regulate currency
Hamilton
The First Bank of the US was chartered in _____
1791
Congress finally agreed to charter the Second Bank of the United States in _____
1816
_______ was an outspoken critic who mistrusted banks with paper money
President Andrew Jackson
During his period all banks were state banks, each of which issued its own paper currency called_____
bank notes
Some of these banks were located in remote areas discourage people from redeeming it. It was this practice, along with the questionable quality of many bank notes, that resulted in the term _______
wildcat bank
The government’s first solution to this problem was to issue a new currency backed by _______
government bonds
These US bank notes were called _____
greenbacks
In 1863, Congress passed the _______, which led to the creation of a system of national banks
National Banking Act
In 1900 the government officially adopted the ______
gold standard
The ________ is a system that backs the basic monetary unit with a set amount of gold
gold standard
