Sajjad1994Q. According to the passage, a large state bank In New York City would most likely take which of the following actions following the passage of the National Bank Act?
A) Immediately give up its state charter and adopt the national currency
B) Switch its name to increase consumer confidence
C) Stop issuing state bank notes in order to increase prestige
D) Continue to increase its use of checksE) Demand that the federal government reduce its state note tax
OA: Option D
OE: For this question, you should go to the last paragraph where large state banks and banks in big cities are discussed. In that paragraph you learn that smaller, less prestigious state banks were more than happy to switch to national charters immediately after the Act was passed because it increased prestige and consumer confidence. However, large well-known state banks did not switch to the national charter until the 10% tax was passed. Therefore, after the passage of the act, a large state bank in New York City would definitely NOT do (A) or (B). Those were things associated with small, lesser-known banks. (C) is also wrong because it was not doing anything to increase prestige as that was not a problem. There is no basis for (E) at all in the passage so you are left with (D). In the following sentence it is clear that large state banks in cities were doing just this: “Those banks that retained state charters were, for the most part, banks in big cities which had been rapidly replacing their notes with check transactions, anyway” Answer is (D).
Q. Which of the followed can be inferred from the passage about the National Bank Act of 1864?
A) It would not have met its goals without additional legislation
B) It reduced the problem of bank note counterfeiting
C) It increased convenience for banking customers by requiring checks
D) It increased the market for government bonds
E) It contributed to a more homogenous national currencyOA- Option E
OE- Again, this is a broad question that requires confirming each answer choice (you will not be looking at only one area in the passage). (A) is incorrect but difficult. You know that the additional legislation in 1865 (the 10% tax) helped dramatically speed up the goals of the original act, but we do NOT know from this that the National Bank Act would not have met its goal without the help of this tax. Remember, the correct answer must be true based upon the passage. For (B) there is no information given about what the Bank Act did to help the problem of counterfeiting – you just know that a problem did exist. For (C), the National Bank Act did not require checks – requiring checks is something that was already taking place in large state banks. For (D), you do not know what effect the National Bank Act had on government bonds. One of the goals was to increase the market for government bonds, but no information was given about whether the goal was achieved. One goal of the National Bank Act was to provide a uniform currency and there is plenty of evidence given in the last paragraph that it was at least partially successful in accomplishing this. Answer is (E)