This quiz consists of 5 multiple choice and 5 short answer questions through Section II. A Crash Course on Money, Chapters 9-10 The Secret Science; The Mandrake Mechanism.

Multiple Choice Questions

1. What solid case did governments make for fiat monetary systems?
(a) As long as governments wanted ever more money for projects such as wars, building infrastructure and social programs, the governments would increase taxes.
(b) As long as governments wanted ever more money for projects such as wars, building infrastructure and social programs, the governments would increase the budget deficit.
(c) As long as governments wanted ever more money for projects such as wars, building infrastructure and social programs, the governments would raise the debt ceiling.
(d) As long as governments wanted ever more money for projects such as wars, building infrastructure and social programs, the governments would increase the money supply.

2. What happens when the Federal Reserve System prints new money?
(a) When the Federal Reserve System creates new money, it improves the overall economy.
(b) When the Federal Reserve System creates new money, it dilutes the value of the money already in the system.
(c) When the Federal Reserve System creates new money, it increases the value of the money already in the system.
(d) When the Federal Reserve System creates new money, it causes the stock market to rally.

3. What was one of the strongest arguments in favor of bank regulation versus nationalization?
(a) An argument in favor of regulation was that it would cause less unemployment.
(b) An argument in favor of regulation was that it would purge the system of fraud and abuse.
(c) An argument in favor of regulation was that, when properly administered, it had worked from the time of Franklin D. Roosevelt (President of the US from 1933 to 1945) to 1970.
(d) An argument in favor of regulation was that the American people felt uncomfortable with nationalization.

4. 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 owns more on the home than it is worth on the market.
(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 must take out a second mortgage.

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