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. The banking system before the Federal Reserve System allowed banks to lend out what percentage of money against one percent in deposits.
(a) The banking system before the Federal Reserve System allowed banks to lend out more money than they held in deposits, up to ninety-nine percent loaned out with only one percent in deposits.
(b) The banking system before the Federal Reserve System allowed banks to lend out more money than they held in deposits, up to fithy percent loaned out with only one percent in deposits.
(c) The banking system before the Federal Reserve System allowed banks to lend out more money than they held in deposits, up to sixty percent loaned out with only one percent in deposits.
(d) The banking system before the Federal Reserve System allowed banks to lend out more money than they held in deposits, up to twenty percent loaned out with only one percent in deposits.

2. What is the definition of a public run on a bank?
(a) A public run occurs when the Federal government takes ownership of a bank.
(b) A public run is when the government puts a bank up for sale.
(c) A public run occurs when a bank runs out of cash.
(d) A public run was when many depositors demanded their cash from a bank and wiped out the bank's reserves.

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

4. What has caused the economy's boom-bust cycle?
(a) The Federal Reserve's advertised purpose was to stabilize the economy, but depressions and recessions have resulted instead in a boom-bust cycle.
(b) The economy's boom-bust cycle is caused from people hoarding cash.
(c) The economy's boom-bust cycle is caused from trade deficits.
(d) The economy's boom-bust cycle is caused by the instability of the International Monetary Fund.

5. What do some feel was the reason for establishing the Federal Reserve?
(a) The Federal Reserve System was concocted not to stabilize the economy and create an economy that was distributed equally among the population.
(b) The Federal Reserve System was concocted not to stabilize the economy but to put economic control into the hands of a few people who agreed not to compete with one another.
(c) The Federal Reserve System was concocted to stabilize the economy.
(d) The Federal Reserve System was concocted to put economic control into the hands of the people.

6. 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 Kennedy took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.
(c) President Nixon took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.
(d) President Lincoln took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.

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

8. What problems did the economy of the American Colonies incur?
(a) The American Colonies experienced economic uncertainty due to interference by England.
(b) The American Colonies experienced terrible bouts of inflation.
(c) The American Colonies experienced terrible bouts of deflation.
(d) The American Colonies experienced instability in their economy.

9. Many people feel that the economic system has been rigged to favor what group of people?
(a) People have realized, at least a little bit, that our economic system had been rigged somewhere in the past to favor the rich by stealing from the government revenues.
(b) People have realized, at least a little bit, that our economic system had been rigged somewhere in the past to favor the rich by stealing from the poor and middle classes.
(c) People have realized, at least a little bit, that our economic system had been rigged somewhere in the past to favor the middle classes by stealing from the rich and poor classes.
(d) People have realized, at least a little bit, that our economic system had been rigged somewhere in the past to favor the poor by stealing from the rich and middle classes.

10. What monetary system did the Constitution of the newly formed United States require?
(a) When the United States was formed, the Constitution required a fractional money system.
(b) When the United States was formed, the Constitution required that all precious metal be in the control of the government.
(c) When the United States was formed, the Constitution required gold-backed money.
(d) When the United States was formed, the Constitution required a paper currency system.

11. During which president's administration were policies that were a hybrid of socialism and capitalism developed?
(a) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during the Eisenhower administration.
(b) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during Franklin D. Roosevelt's administration.
(c) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during the Nixon administration.
(d) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during the Truman administration.

12. Why did banks offer debtors more credit?
(a) Banks offered more credit to debtors to so they could increase their purchasing power.
(b) Banks offered more credit to debtors to help improve their credit rating.
(c) Banks offered more credit to debtors to help them purchase homes.
(d) Banks offered more credit to debtors to increase interest payments to the them.

13. How open to questioning were the original participants of the 1910 meeting?
(a) The participants at the 1910 meeting would only agree to talk about the establishment of the Federal Reserve with the New York Times.
(b) Most of the participants at the 1910 meeting openly talked about the establishment of the Federal Reserve in interviews conducted years later.
(c) Only some of the participants at the 1910 meeting talked about the establishment of the Federal Reserve in interviews conducted years later.
(d) None of the participants at the 1910 meeting talked about the establishment of the Federal Reserve in interviews conducted years later.

14. What was the main argument in favor of nationalizing banks?
(a) The fundamental argument in favor of the nationalization was that such bailouts would be allowed only once.
(b) The fundamental argument in favor of the nationalization was that the system had to be purged of risk-taking bank executives.
(c) The fundamental argument in favor of the nationalization was that the system was so broken that it simply could not be regulated enough to work without eventually nationalizing all banking and industry.
(d) The fundamental argument in favor of the nationalization was that a weak economy would recover more quickly.

15. What new way of home ownership emerged in the 1980s?
(a) Housing co-ops became another way to buy a home.
(b) A government sponsored home buyer's savings program was established.
(c) The government incentivized buyers to buy foreclosed upon homes.
(d) Condominiums became a new way to buy a home.

Short Answer Questions

1. How was the nationalization of banks justified?

2. Why did all nations become socialistic in the New World Order?

3. Why was platinum not used to back the monetary system?

4. How does a currency drain occur within the banking system?

5. What importance does political ideology have on the nationalization of banks?

(see the answer keys)

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