The Creature from Jekyll Island: A Second Look at the Federal Reserve Test | Mid-Book Test - Easy

G. Edward Griffin
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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. During the history of the world, what types of things were first traded?
(a) During the history of money development, trade started out with a rudimentary currency system.
(b) During the history of money development, the first currency system was based on grain and livestock.
(c) During the history of money development, trade started out with bartering commodities, cows traded for grain and so on.
(d) During the history of money development, trade started out between neighboring communities.

2. This conspiracy theory about the Federal Reserve pointed the finger at the meeting on Jekyll Island that occurred in 1910.
(a) The conspiracy theory surrounding the Federal Reserve was thought to have originated during the Great Depression.
(b) The conspiracy theory surrounding the Federal Reserve was thought to have originated during FDR's administration.
(c) The conspiracy theory surrounding the Federal Reserve was thought to be hatched at the 1910 Jekyll Island meeting.
(d) The conspiracy theory surrounding the Federal Reserve was thought to have originated at the 1904 World's Fair.

3. What city became a major part of the welfare state in 1975?
(a) New York City became a major part of the welfare state in 1975 via Federal government bailouts.
(b) Atlanta became a major part of the welfare state in 1975 via Federal government bailouts.
(c) Chicago became a major part of the welfare state in 1975 via Federal government bailouts.
(d) Los Angeles became a major part of the welfare state in 1975 via Federal government bailouts.

4. How did the government provide economic support to Lockheed Corporation in 1970?
(a) In 1970, Lockheed Corporation had troubles and became a prime government contractor, another way of nationalizing private industry.
(b) In 1970, the US government agreed to pay Lockheed Corporation twenty-percent over their selling prices.
(c) In 1970, Lockheed Corporation was made a unit of the Defense Department.
(d) In 1970, Lockheed Corporation was forgiven of all defense-related debt.

5. What resulted when paper money was not backed with gold or silver?
(a) Money not backed by precious metal led to booming economies and political stability.
(b) Money not backed by precious metal led to inflation and political upheaval.
(c) Money not backed by precious metal led to deflation and political upheaval.
(d) Money not backed by precious metal led to higher deficits.

6. How is the Federal Reserve System reviewed in general?
(a) The Federal Reserve System had become the lender of last resort.
(b) The Federal Reserve System had become known to have the strictest lending standards.
(c) The Federal Reserve System had become the economic leader of the country.
(d) The Federal Reserve System had become the nation's first source of lending.

7. What is the status of a loan that is "underwater?"
(a) When a home loan is underwater, the homeowner is forced into bankruptcy.
(b) When a home loan is underwater, the homeowner must take out a second mortgage.
(c) When a home loan is underwater, the homeowner is forced into foreclosure by the lender.
(d) When a home loan is underwater, the homeowner owns more on the home than it is worth on the market.

8. What countries did the author point to as failures of the IMF and World Bank?
(a) The author used Venezuela, Chili, Cuba and Uraguay as examples of IMF and World Bank failures.
(b) The author used Tanzania, Argentina, Brazil and Mexico as examples of IMF and World Bank failures.
(c) The author used Greece, Ireland, Italy and Kirghistan as examples of IMF and World Bank failures.
(d) The author used The Sudan, China, Pakistan and Afghanistan as examples of IMF and World Bank failures.

9. What importance does political ideology have on the nationalization of banks?
(a) Liberal ideologues have the great influence on bank legislation.
(b) Political lobbyists for banks have great influence on their nationalization.
(c) The Congressional chairman of the Banking Committee influences support for nationalization.
(d) The nationalization of banks is such a strong part of the overall economy that political ideology did not matter.

10. What U.S. president removed the gold standard from the US dollar?
(a) President Wilson took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.
(b) President Lincoln took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.
(c) President Kennedy took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.
(d) President Nixon took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.

11. After analysis, what was the real nature of the S&L system?
(a) The S&L system turned out to actually be criminal.
(b) The S&L system turned out to actually be a scam.
(c) The S&L system turned out to actually be a cartel within a cartel.
(d) The S&L system turned out to actually be operated by international interests.

12. Prior to the establishment of the Federal Reserves, what caused massive bank failures?
(a) The Great Depression proved to be an unbearable strain on the banking system.
(b) Foreign debtors demanded the full repayment of loands.
(c) US bonds were devalued by the Federal authorities.
(d) There were public runs on the banks and currency drains from other banks demanding payments.

13. 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 Alcatraz Island.
(b) The concept of the Federal Reserve was developed on Jekyll Island.
(c) The concept of the Federal Reserve was developed on Long Island.
(d) The concept of the Federal Reserve was developed in the Hawaiin Islands.

14. Conspiracy theorists connected the potential of world socialism to what organization?
(a) This conspiracy theory encompassed the entire world by connecting the Federal Reserve with socialism.
(b) This conspiracy theory encompassed the entire world by connecting the IMF with socialism.
(c) This conspiracy theory encompassed the entire world by connecting the United Nations with socialism.
(d) This conspiracy theory encompassed the entire world by connecting the World Bank with socialism.

15. How does a currency drain occur within the banking system?
(a) A currency drain occurs when the government devalues the currency system.
(b) A currency drain happened when many depositors wrote checks, and the receivers of the checks cashed them at another bank, thereby requiring more money from the first bank than it had on hand.
(c) A currency drain occurs when the Federal government demands repayment of loans.
(d) A currency drain occurs when foreign investors withdrawn their funds from US banks.

Short Answer Questions

1. If the debtors stopped paying banks altogether, what action would the Federal Reserve System take?

2. What unreasonable conclusion does the author make about the IMF and World Bank?

3. What often occurs to a conspiracy theory when deceit is not used to strengthen their case?

4. Why did banks offer debtors more credit?

5. How did the Federal Reserve System accomplish the nationalization of banks?

(see the answer keys)

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