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 was the location of the meeting where the concept of the Federal Reserve was developed?
(a) The concept of the Federal Reserve was developed on Jekyll Island.
(b) The concept of the Federal Reserve was developed on Alcatraz Island.
(c) The concept of the Federal Reserve was developed in the Hawaiin Islands.
(d) The concept of the Federal Reserve was developed on Long Island.

2. What is the definition of a public run on a bank?
(a) A public run is when the government puts a bank up for sale.
(b) A public run was when many depositors demanded their cash from a bank and wiped out the bank's reserves.
(c) A public run occurs when the Federal government takes ownership of a bank.
(d) A public run occurs when a bank runs out of cash.

3. 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.

4. What is the true function of the FDIC?
(a) The FDIC is another way to demonstrate the strength of the economy.
(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 pay off banking mistakes through the taxpayer.

5. What happened when a debtor defaulted on a loan?
(a) When a debtor defaulted on a loan, he would ask loan payments be waived.
(b) When a debtor defaulted on a loan, he would first ask for more time to pay.
(c) When a debtor defaulted on a loan, he would ask the government for a guaranteed loan.
(d) When a debtor defaulted on a loan, he would stop making payments.