Final answer:
The statement that lending credibility to financial information is known as certification is true. Certification, through documentation and credit checks, is essential in the banking process for issuing loans. Factors such as lower interest rates and a better economic outlook can increase the quantity of loans, while the Panic of 1819 decreased faith in the Second Bank of the United States.
Step-by-step explanation:
The lending of credibility to financial information is commonly referred to as certification. This is a true statement. Certification plays a crucial role in the financial markets where the accuracy and reliability of financial information are paramount. For instance, before a bank issues a loan, it requires thorough documentation from the prospective borrower, such as income sources, and performs a credit check to assess the borrower's credit history. Banks may also require collateral, which serves as security for the loan, or a co-signer who agrees to take on the debt obligations if the primary borrower fails to repay.
Regarding the question about the increase in the number of loans made and received in the financial market, one factor that could lead to such an increase is a decrease in interest rates, which lowers the cost of borrowing, stimulating demand for loans. Additionally, improved economic conditions and higher confidence may also lead lenders to offer more loans and borrowers to seek them actively.
The Panic of 1819 decreased the American public's faith in the Second Bank of the United States, making the correct answer to this statement false.