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This quiz consists of 5 multiple choice and 5 short answer questions through Section I. What Creature Is This? Chapter 3 Protectors of the Public.

Multiple Choice Questions

1. This conspiracy theory about the Federal Reserve pointed the finger at the meeting on Jekyll Island that occurred in 1910.
(a) The conspiracy theory surrounding the Federal Reserve was thought to have originated during the Great Depression.
(b) The conspiracy theory surrounding the Federal Reserve was thought to have originated at the 1904 World's Fair.
(c) The conspiracy theory surrounding the Federal Reserve was thought to have originated during FDR's administration.
(d) The conspiracy theory surrounding the Federal Reserve was thought to be hatched at the 1910 Jekyll Island meeting.

2. What historic reference is contained in this chapter?
(a) A history of bailouts was outlined in this chapter, starting in 1970 with Penn Central Railroad.
(b) A history of legislation regarding the Federal Reserve is contained in this section.
(c) A history of the laws regulating the economy is contained in this chapter.
(d) A history of the Federal Reserve chairmain is contained in this section.

3. The Federal Reserve System was designed to control what element of member banks?
(a) The Federal Reserve System was designed to control a bank's cash flow.
(b) The Federal Reserve System was designed to control a bank's ability to make loans.
(c) The Federal Reserve System was designed to control how much reserve cash a bank can invest in its expansion.
(d) The Federal Reserve System was designed to control how much reserve cash any member bank had to keep on hand.

4. 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, the US government agreed to pay Lockheed Corporation twenty-percent over their selling prices.
(c) In 1970, Lockheed Corporation was made a unit of the Defense Department.
(d) In 1970, Lockheed Corporation had troubles and became a prime government contractor, another way of nationalizing private industry.

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

Short Answer Questions

1. What happens when the Federal Reserve System prints new money?

2. How did the Federal Reserve System accomplish the nationalization of banks?

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

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

5. Why did banks make risky loans?

(see the answer key)

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