303 $
© 2014 Pearson Canada Inc.$- Explain how the dual banking system arose in the United States.
Answer: The modern US system because with all commercial banks being chartered by the state
in which they operated. However lax banking laws led to bank failures. To eliminate the abuses
that led to the failures, federally charged banks were created under the National Bank Act of
- As a result today, the US has dual banking system in which banks are supervised by either
the state or the federal government.
Diff: 2 Type: SA Page Ref: 239
Skill: Recall
Objective List: 11.1 Chronicle the historical development of the Canadian banking industry and
its current structure
11.2 Financial Innovation and the Growth of the "Shadow Banking System"
Financial innovations occur because of financial institutions search for ____.
A) profits
B) fame
C) stability
D) recognition
Answer: A
Diff: 1 Type: MC Page Ref: 242 - 243
Skill: Recall
Objective List: 11.2 Examine financial innovation and the growth of the "shadow banking
system"
____ is the process of researching and developing profitable new products and services
by financial institutions.
A) Financial engineering
B) Financial manipulation
C) Customer manipulation
D) Customer engineering
Answer: A
Diff: 1 Type: MC Page Ref: 243
Skill: Recall
Objective List: 11.2 Examine financial innovation and the growth of the "shadow banking
system"
The most significant change in the economic environment that changed the demand for
financial products in recent years has been ____.
A) the aging of the baby-boomer generation
B) the dramatic increase in the volatility of interest rates
C) the dramatic increase in competition from foreign banks
D) the deregulation of financial institutions
Answer: B
Diff: 2 Type: MC Page Ref: 243
Skill: Recall
Objective List: 11.2 Examine financial innovation and the growth of the "shadow banking
system"