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

2. What type of person was Paul Moritz Warburg?
(a) Paul Moritz Warburg was a stubborn man concerned only with the wealth of the upper class.
(b) Paul Moritz Warburg was a rude and greedy man.
(c) Paul Moritz Warburg was a mild-mannered, shy and sensitive man.
(d) Paul Moritz Warburg was an elitist who was not concerned with the concerns of the poor.

3. Why did banks make risky loans?
(a) The banks had incentive in terms of high profits for granting mortgages to home buyers who would not be able to pay the loans off, but who might be able to make interest payments.
(b) Banks did not thoroughly check out the risk factor of some borrowers.
(c) Banks are required by the Federal Reserve to make a certain percentage of risky loans.
(d) The US Congress passed legislation that required banks to make ten percent of their loans to risky borrowers.

4. What did the issuance of the first paper money lead to?
(a) The lending process evolved from the establishment of the paper money system.
(b) Stronger economies evolved from the establishment of the paper money system.
(c) The class system evolved from the establishment of the paper money system.
(d) Banks evolved from the establishment of the paper money system.

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

6. What organization ensures the nationalization of banks?
(a) As long as the Congressional Banking Committee existed, it would continue nationalizing banks and perhaps other industries as they fell into financial difficulties.
(b) As long as the FDIC existed, it would continue nationalizing banks and perhaps other industries as they fell into financial difficulties.
(c) As long as the International Monetary Fund existed, it would continue nationalizing banks and perhaps other industries as they fell into financial difficulties.
(d) As long as the Federal Reserve System existed, it would continue nationalizing banks and perhaps other industries as they fell into financial difficulties.

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

8. What occurred when coinage was weakened through lower percentages of precious metal or completing stripped of such backing?
(a) Deflation resulted when the coinage was debased through lower percentages of precious metal or none at all.
(b) Inflation and political turmoil occurred when the coinage was debased through lower percentages of precious metal or none at all.
(c) Stock market instability occurred when the coinage was debased through lower percentages of precious metal or none at all.
(d) Paper money was seen to be the superior monetary system when the coinage was debased through lower percentages of precious metal or none at all.

9. Why was the "Federal Reserve System," so named?
(a) The "Federal Reserve System" was so named so that people would have respect for it.
(b) The "Federal Reserve System" was so named because its offices were not state run.
(c) The "Federal Reserve System" was so named so that people would know that it was part of the Federal government.
(d) The "Federal Reserve System" was so named so that people would think it was part of the Federal government.

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

11. Why has bank fraud never been eliminated?
(a) The Federal Reserve was controlled by outside political interests that fostered fraud.
(b) The Federal Reserve tried to institute European standards which led to the perpetuation of fraud.
(c) Financial experts were taught that the way banking worked in the US was the only way it could work, and so the fraud kept on going.
(d) The Federal Reserve was influenced by lobbyists who advocated fraudulent regulations.

12. 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.

13. What generalization did the author make about conspiracy theorists?
(a) Those who believe in conspiracy theories usually are better educated than the average person.
(b) There were two kinds of people in the world--those who believed in conspiracy and those who did not.
(c) Those who believe in conspiracy theories are usually more well-informed than most people.
(d) Conspiracy theorists are generally more intelligent than the general population.

14. How did many people feel about those who went too far into debt?
(a) Many felt that people who were in debt had been encouraged to do so by political figures.
(b) Many felt that the nation had been taught to rely too much on credit.
(c) Many argued that people who went too far into debt had done this on their own--nobody had forced people into the mortgages or credit cards.
(d) Many argued that those in deep debt should be forgiven much of their dept because of the reclining economy.

15. Why did banks offer debtors more credit?
(a) Banks offered more credit to debtors to help improve their credit rating.
(b) Banks offered more credit to debtors to so they could increase their purchasing power.
(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.

Short Answer Questions

1. The nationalization of banks has occurred during conservative or liberal administrations?

2. What do many people feel was the real reason behind the establishment of the Federal Reserve?

3. During the history of the world, what types of things were first traded?

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

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

(see the answer keys)

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