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This quiz consists of 5 multiple choice and 5 short answer questions through Section I. What Creature Is This? Chapter 2 The Name of the Game Is Bailout.

Multiple Choice Questions

1. What was the main cause of the economic meltdown in 2008?
(a) An unstable world economy was the main cause for the 2008 economic meltdown.
(b) Toxic assets, also known as mortgages and loans were the main cause for the 2008 economic meltdown.
(c) The lack of Congressional legislation was the main cause for the 2008 economic meltdown.
(d) The US deficit was the main cause for the 2008 economic meltdown.

2. The Federal Reserve System was designed to control what element of member banks?
(a) The Federal Reserve System was designed to control a bank's cash flow.
(b) The Federal Reserve System was designed to control how much reserve cash a bank can invest in its expansion.
(c) The Federal Reserve System was designed to control a bank's ability to make loans.
(d) The Federal Reserve System was designed to control how much reserve cash any member bank had to keep on hand.

3. What was the location of the meeting where the concept of the Federal Reserve was developed?
(a) The concept of the Federal Reserve was developed on Long Island.
(b) The concept of the Federal Reserve was developed on Alcatraz Island.
(c) The concept of the Federal Reserve was developed in the Hawaiin Islands.
(d) The concept of the Federal Reserve was developed on Jekyll Island.

4. What does the FDIC stand for?
(a) The FDIC stands for The Federal Deposit Insurance Corporation.
(b) The FDIC stands for The Federal Debt Issuers Company.
(c) The FDIC stands for The First Debt Institute of Connneticut.
(d) The FDIC stands for The First Depositor's Insurance Corporation.

5. What is the true function of the FDIC?
(a) The FDIC is another way to demonstrate the strength of the economy.
(b) The FDIC is another way to pay off banking mistakes through the taxpayer.
(c) The FDIC is another way to pay off the debt of the taxpayer.
(d) The FDIC is another way to support the people who use banks.

Short Answer Questions

1. When the entire banking system failed, what did the Federal government turn to to bolster the failed back up system?

2. Why did banks ask for interest-only payments?

3. Many people feel that the economic system has been rigged to favor what group of people?

4. What is the definition of a public run on a bank?

5. Why has bank fraud never been eliminated?

(see the answer key)

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