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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. Why did banks ask for interest-only payments?
(a) The bank would arrange for interest payments only to keep the profits coming in.
(b) The bank would arrange for interest payments only so that their customers could keep a good credit rating>
(c) The bank would arrange for interest payments only to take the burden off the customer.
(d) The bank would arrange for interest payments only to keep the loan viable.

2. 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 Long Island.
(b) The concept of the Federal Reserve was developed on Jekyll Island.
(c) The concept of the Federal Reserve was developed in the Hawaiin Islands.
(d) The concept of the Federal Reserve was developed on Alcatraz Island.

3. 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.

4. What is the main transport of both Amtrak and Conrail?
(a) Amtrak operates as a commuter train while Conrail operates as a long-distance carrier.
(b) Amtrak is the main carrier for government cargo and Conrail is available to the general public.
(c) Amtrak had been the passenger side of Penn Central, while Conrail had been the freight side.
(d) Amtrak had been the freight side of Penn Central, while Conrail had been the passenger side.

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 get bailouts, medium-sized banks would get some bailouts, and small banks would be left to fail or be acquired by larger banks.
(b) Since its inception in 1910, the Federal Reserve had decided that large banks would be the only banks to get bailouts.
(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.

Short Answer Questions

1. What caused the economy to get into such a state that the government was compelled to bail out banks?

2. What organization ensures the nationalization of banks?

3. What do some feel was the reason for establishing the Federal Reserve?

4. What was one of the strongest arguments in favor of bank regulation versus nationalization?

5. What city became a major part of the welfare state in 1975?

(see the answer key)

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