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This quiz consists of 5 multiple choice and 5 short answer questions through Section I. What Creature Is This? Chapter 2 The Name of the Game Is Bailout.

Multiple Choice Questions

1. What did the Federal Reserve System help banks to do?
(a) The Federal Reserve helped banks by making special laws for them.
(b) The Federal Reserve helped banks to stay in operation.
(c) The Federal Reserve helped banks keep a healthy cash flow.
(d) The Federal Reserve helped banks keep individuals, businesses and entire countries perpetually in debt and working mostly for the banks.

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

3. Why did banks ask for interest-only payments?
(a) The bank would arrange for interest payments only to take the burden off the customer.
(b) The bank would arrange for interest payments only to keep the loan viable.
(c) The bank would arrange for interest payments only to keep the profits coming in.
(d) The bank would arrange for interest payments only so that their customers could keep a good credit rating>

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

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

Short Answer Questions

1. What do some feel was the reason for establishing the Federal Reserve?

2. Who was the mastermind behind the Federal Reserve?

3. How did many people feel about those who went too far into debt?

4. This conspiracy theory about the Federal Reserve pointed the finger at the meeting on Jekyll Island that occurred in 1910.

5. What did the U.S. government do to support banks?

(see the answer key)

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