Question

1-The United States has a dual banking system, which means that a bank

A-may take out a primary credit discount loan or a secondary credit discount loan.

B-may hold its reserves either in the form of vault cash or as deposits at a Federal Reserve Bank.

C-has two regulators.

D-may be chartered by federal government authorities or by a state government.

2-The funds used to pay for FDIC insurance coverage come from

		A-taxes imposed on interest income.
		B-U.S. government tax revenue.
		C-insurance premiums paid by banks.
		D-insurance premiums paid by depositors.

Answer 1

Question 1

Dual banking system is a banking system in which banks are not only established under a national law but state governments can also establish banks by enacting specific state laws.

So,

Dual banking system with respect to United States implies that a bank may be chartered by federal government authorities or by a state government.

Hence, the correct answer is the option (D).

Question 2

FDIC provides insurance coverage to the deposits (up to a certain limit) made with the commercial and other member banks.

FDIC collects insurance premium from respective banks to extend this service to them.

So,

The funds used to pay for FDIC insurance coverage comes from insurance premium paid by banks.

Hence, the correct answer is the option (C).