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

2. If the debtors stopped paying banks altogether, what action would the Federal Reserve System take?
(a) If the debtors stopped paying altogether, the Federal Reserve System gave the banks more money.
(b) If the debtors stopped paying altogether, the Federal Reserve System filed suit in Federal Court.
(c) If the debtors stopped paying altogether, the Federal Reserve System fined them.
(d) If the debtors stopped paying altogether, the Federal Reserve System refused to back the bad debt.

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

4. When the entire banking system failed, what did the Federal government turn to to bolster the failed back up system?
(a) When the whole banking system collapsed, taxpayer money went into bolstering the failed system back up.
(b) When the whole banking system collapsed, the debt ceiling was raised to bolster the failed system back up.
(c) When the whole banking system collapsed, foreign investments went into bolstering the failed system back up.
(d) When the whole banking system collapsed, money from newly issued government bonds went into bolstering the failed system back up.

5. How did many people feel about those who went too far into debt?
(a) Many felt that the nation had been taught to rely too much on credit.
(b) Many argued that those in deep debt should be forgiven much of their dept because of the reclining economy.
(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 felt that people who were in debt had been encouraged to do so by political figures.