What impacts did the decentralization of the U.S. banking system during the Free Banking Era have on the currency in the United States? Select the two correct answers.(1 point)

Question

Responses

Monetary reserves decreased.
Monetary reserves decreased.

The purchasing power currencies issued by state banks varied wildly from state to state.
The purchasing power currencies issued by state banks varied wildly from state to state.

The amount of loanable funds increased.
The amount of loanable funds increased.

The money supply declined.
The money supply declined.

Land was frequently purchased with counterfeit currency.
Land was frequently purchased with counterfeit currency.

Answer 1

The two correct answers about the impacts of the decentralization of the U.S. banking system during the Free Banking Era on the currency in the United States are:

1. The purchasing power currencies issued by state banks varied wildly from state to state.
2. The amount of loanable funds increased.

During this era, different state-chartered banks could issue their own currency, leading to significant variations in the value of those currencies, and the increased competition among banks often resulted in a greater availability of loanable funds.