The Financial Panic of 1907 Resulted in Such Widespread Bank

question 53

Multiple Choice

The financial panic of 1907 resulted in such widespread bank failures and substantial losses to depositors that the American public finally became convinced that

• A)the First Bank of the United States had failed to serve as a lender of last resort.
• B)the Second Bank of the United States had failed to serve as a lender of last resort.
• C)the Federal Reserve System had failed to serve as a lender of last resort.
• D)a central bank was needed to prevent future panics.

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Definitions:

Fixed Monthly Expenses

Recurring expenses that do not change in amount from month to month, such as rent, salaries, and insurance premiums.

Net Operating Income

Income from operations after deducting operating expenses but before interest and taxes.

Variable Cost Per Unit

The cost that changes in proportion to the level of output or activity, calculated on a per-unit basis.

Net Operating Income

A company's total earnings derived from its operations, excluding taxes and interest.