1. What risky loan activities have banks participated in?
(a) Banks loaned depositors' money out to risky debtors who would likely not be able to pay the loans off.
(b) Banks loaned depositors' money out to to the US government in times of economic downturns.
(c) Banks loaned depositors' money to foreign governments who refused to repay the loans.
(d) Banks loaned depositors' money out to poor people during the Great Depression.

2. How did the government provide economic support to Lockheed Corporation in 1970?
(a) In 1970, Lockheed Corporation was forgiven of all defense-related debt.
(b) In 1970, Lockheed Corporation had troubles and became a prime government contractor, another way of nationalizing private industry.
(c) In 1970, Lockheed Corporation was made a unit of the Defense Department.
(d) In 1970, the US government agreed to pay Lockheed Corporation twenty-percent over their selling prices.

3. What caused the economy to get into such a state that the government was compelled to bail out banks?
(a) The argument could be made that lax lending practices and overly speculative investments had forced the government to use tax dollars in the bailouts.
(b) The American people were taking out too many home loans.
(c) The US Congress failed to pass legislation that would have boosted the economy.
(d) The International Monetary Fund had become dangerously unstable.

4. What is the definition of a public run on a bank?
(a) A public run occurs when a bank runs out of cash.
(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 is when the government puts a bank up for sale.

5. Since its inception in 1910, the Federal Reserve had made what decisions about bank bailouts?
(a) Since its inception in 1910, the Federal Reserve had decided that large banks would be the only banks to get bailouts.
(b) Since its inception in 1910, the Federal Reserve had decided that large banks would get bailouts, medium-sized banks would get some bailouts, and small banks would be left to fail or be acquired by larger banks.
(c) Since its inception in 1910, the Federal Reserve had decided that medium-sized banks would get the majority of bailouts.
(d) Since its inception in 1910, the Federal Reserve had decided that large banks would get bailouts only if they could prove they had complied with all regulations.