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

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

3. What was the main cause of the economic meltdown in 2008?
(a) The lack of Congressional legislation was the main cause for the 2008 economic meltdown.
(b) Toxic assets, also known as mortgages and loans were the main cause for the 2008 economic meltdown.
(c) The US deficit was the main cause for the 2008 economic meltdown.
(d) An unstable world economy was the main cause for the 2008 economic meltdown.

4. Who does the Federal Reserve depend on to bail out the country in times of economic collapse?
(a) The Federal Reserve turns to Congress to bail out the country in times of economic collapse.
(b) The Federal Reserve turns to the foreign investors to bail out the country in times of economic collapse.
(c) The Federal Reserve turns to the taxpayer to bail out the country in times of economic collapse.
(d) The Federal Reserve turns to the banks to bail out the country in times of economic collapse.

5. How does a currency drain occur within the banking system?
(a) A currency drain occurs when foreign investors withdrawn their funds from US banks.
(b) A currency drain occurs when the Federal government demands repayment of loans.
(c) A currency drain occurs when the government devalues the currency system.
(d) A currency drain happened when many depositors wrote checks, and the receivers of the checks cashed them at another bank, thereby requiring more money from the first bank than it had on hand.