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This quiz consists of 5 multiple choice and 5 short answer questions through Section I. What Creature Is This? Chapter 4 Home Sweet Loan.

Multiple Choice Questions

1. Why was housing becoming difficult to obtain in the 1980s?
(a) Congressional actions began to place restrictive regulations on house buying.
(b) Wages were not keeping up with inflation, which made housing harder to obtain.
(c) The construction industry was experiencing labor conflicts.
(d) The cost of housing was sky-rocketing.

2. What economic group is hit the hardest by an inflation?
(a) Only the very wealthiest people are hurt by inflation.
(b) Inflation damages only the very poor in a society.
(c) Inflation has been a problem for the rich and poor alike, although it hit the chronically poor harder than anyone.
(d) Only the middle class is hurt by inflation.

3. How was some property converted for home ownership during the 1980s?
(a) In some towns, student housing was converted to property that was sold to homeowners.
(b) Trailer parks were developed as suburban subdivisions.
(c) Less expensive condominiums that often times had been rental apartments became another way. Rent-to-buy deals popped into the market.
(d) Some storefront small business buildings were converted to property that was sold for private homes.

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

5. The nationalization of banks has occurred during conservative or liberal administrations?
(a) The nationalization of banks occurred when there is equal balance among all branches of government.
(b) The nationalization of banks occurred during liberal administrations.
(c) The nationalization of banks occurred during conservative administrations.
(d) The nationalization of banks occurred during conservative as well as liberal administrations.

Short Answer Questions

1. What is the true function of the FDIC?

2. Why has bank fraud never been eliminated?

3. What was the main argument in favor of nationalizing banks?

4. In what year was First Pennsylvania Bank bailed out?

5. What impacted housing prices in the Midwest states?

(see the answer key)

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