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# The National Bank Act was passed in 1864 to provide a uniform currency

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The National Bank Act was passed in 1864 to provide a uniform currency  [#permalink]

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09 Aug 2019, 03:05
Official Explanation

3. Which of the following can be inferred from the passage?

Difficulty Level: 750

Explanation

In paragraph two, the capitalization requirements for banks are discussed, and the minimum capitalization for a small town of 6,000 or less is set at \$50,000. Thus, answer choice E is true - such a bank would not qualify for a federal charter.

Choice A is incorrect as the passage does not stipulate the next level above 6,000 residents; it could be that that level held for cities up to 20,000 or more.

And choice B is wrong in that the capitalization requirement is only one of the requirement to receive a charter. Such a bank may have failed another requirement.

Choice C is incorrect, as the stipulations only talk about the minimum requirements, and don't say that there would be anything stopping a smaller-town bank from exceeding that total.

And choice D is wrong for the same reason; we know the minimum capitalization but not the maximum, so such a bank could have had more cash on hand than \$200,000.

Hope it helps

Hello carcass - could you explain question 3 here. I don't think any of the answer choices are correct - My explanation for option a below

3. Which of the following can be inferred from the passage?

(A) A national bank with an initial capitalization of \$50,000 in 1864 must have been located in a city of less than 6,000 residents.

As per the passage -
# 6000 people --- 50,000 (min capitalization)
(but reverse will not always be true). Right ?? so 50 K min capitalization can be in two cases -
CASE 1 - less than 6000 people
CASE 2 - more than 6000 people.
Only other data point we have is for 50,000 people - 200,000 capitalization
So how can we infer a is correct ???

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Re: The National Bank Act was passed in 1864 to provide a uniform currency  [#permalink]

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03 Sep 2019, 23:35
3. Which of the following can be inferred from the passage?

(A) A national bank with an initial capitalization of \$50,000 in 1864 must have been located in a city of less than 6,000 residents.
(B) A national bank with an initial capitalization of \$225,000 would be guaranteed a federal charter regardless of location.
(C) A national bank with an initial capitalization of \$250,000 in 1864 must have been located in a city of more than 50,000 residents.
(D) A national bank located in a city with 40,000 residents must have had an initial capitalization of between \$50,000 and \$200,000.
(E) A national bank with an initial capitalization of \$45,000 would not have received a charter from the federal government.

why c is incorrect ?
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Re: The National Bank Act was passed in 1864 to provide a uniform currency  [#permalink]

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04 Sep 2019, 00:14

https://gmatclub.com/forum/the-national ... l#p2333902

dharam44 wrote:
3. Which of the following can be inferred from the passage?

(A) A national bank with an initial capitalization of \$50,000 in 1864 must have been located in a city of less than 6,000 residents.
(B) A national bank with an initial capitalization of \$225,000 would be guaranteed a federal charter regardless of location.
(C) A national bank with an initial capitalization of \$250,000 in 1864 must have been located in a city of more than 50,000 residents.
(D) A national bank located in a city with 40,000 residents must have had an initial capitalization of between \$50,000 and \$200,000.
(E) A national bank with an initial capitalization of \$45,000 would not have received a charter from the federal government.

why c is incorrect ?

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Re: The National Bank Act was passed in 1864 to provide a uniform currency  [#permalink]

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11 Sep 2019, 11:13
1
Hi

Veritas prep rates this passage as 600 level.

Am I the only one who is finding this passage a bit difficult or is it really a 600 level passage?

Request experts experts and others opinion on the difficulty level of veritas prep passages

Thanks
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Re: The National Bank Act was passed in 1864 to provide a uniform currency  [#permalink]

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21 Sep 2019, 05:27
tejyr wrote:
thakushr wrote:
I am having hard time understanding it

This Act permitted five or more persons to charter a national bank, the charter being issued by the federal government. The bank’s capitalization depended upon the size of the town in which the bank was located, with the capitalization level going higher for larger cities. For example, banks in towns of less than 6,000 people had to have a minimum capitalization of \$50,000; banks in cities of 50,000 people or more had to have a minimum capitalization of \$200,000.

Q3 which you are having doubt is inferred from the above sentence of 3rd para last line. Actually this type of inference does not refer to any particular aspect in question but as per the options (which have \$ and people) I got to this line.

(A) A national bank with an initial capitalization of \$50,000 in 1864 must have been located in a city of less than 6,000 residents.-For example, banks in towns of less than 6,000 people had to have a minimum capitalization of \$50,000; banks in cities of 50,000 people or more had to have a minimum capitalization of \$200,000
inferrable which is exact as above pasted example line
(B) A national bank with an initial capitalization of \$225,000 would be guaranteed a federal charter regardless of location.-Can't be inferred nowhere stated like that
(C) A national bank with an initial capitalization of \$250,000 in 1864 must have been located in a city of more than 50,000 residents.-For example, banks in towns of less than 6,000 people had to have a minimum capitalization of \$50,000; banks in cities of 50,000 people or more had to have a minimum capitalization of \$200,000
-We can't infer as only we know >50000 residents there will be min \$200000 also <6000 can have \$250000 as min is \$50000
(D) A national bank located in a city with 40,000 residents must have had an initial capitalization of between \$50,000 and \$200,000.-Can't be inferred
(E) A national bank with an initial capitalization of \$45,000 would not have received a charter from the federal government.-Can't be inferred

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Re: The National Bank Act was passed in 1864 to provide a uniform currency  [#permalink]

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08 Apr 2020, 01:43
Could someone explain the answers to all 3 questions ?
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Re: The National Bank Act was passed in 1864 to provide a uniform currency  [#permalink]

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08 Apr 2020, 04:38
Montyyy95 wrote:
Could someone explain the answers to all 3 questions ?

https://gmatclub.com/forum/the-national ... l#p1961068

https://gmatclub.com/forum/the-national ... l#p2333902

https://gmatclub.com/forum/the-national ... l#p2068100

Good Luck
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Re: The National Bank Act was passed in 1864 to provide a uniform currency  [#permalink]

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08 Apr 2020, 22:08
HI GMATNinja would love your two cents on these inference questions ..
Thanks
Re: The National Bank Act was passed in 1864 to provide a uniform currency   [#permalink] 08 Apr 2020, 22:08

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