What role did the First Bank of the United States play in the financial panic of 1792? The bank did not print enough money The bank priced bonds to low The bank issued bank notes and loans creating speculation The bank did not loan enough money

Question

What role did the First Bank of the United States play in the financial panic of 1792? The bank did not print enough money The bank priced bonds to low The bank issued bank notes and loans creating speculation The bank did not loan enough money

Answer 1

The bank issued bank notes and loans creating speculation.

Answer 2

## Step 1The First Bank of the United States was established in 1791, and it played a significant role in the financial panic of 1792. The bank was authorized to issue banknotes and loans, which were backed by government securities. ## Step 2The bank's issuance of banknotes and loans led to an increase in the money supply, which in turn led to inflation. This inflation caused a decrease in the value of the banknotes, leading to a financial panic.## Step 3The banknotes issued by the bank were not backed by hard assets, which led to a lack of confidence in the banknotes. This lack of confidence led to a financial panic, as people began to hoard gold and silver, leading to a decrease in the money supply.## Step 4The bank's actions of issuing banknotes and loans created speculation, which led to an increase in the money supply. This increase in the money supply led to inflation, which in turn led to a financial panic.

Problemas

What role did the First Bank of the United States play in the financial panic of 1792? The bank did not print enough money The bank priced bonds to low The bank issued bank notes and loans creating speculation The bank did not loan enough money

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