This quiz consists of 5 multiple choice and 5 short answer questions through Section I. What Creature Is This? Chapters 5-6 Nearer to the Heart's Desire; Building the New World Order.

Multiple Choice Questions

1. The author made what sports analogy to describe the problems with the banking system?
(a) Using a soccer analogy, the problems with the banking system were presented in a fairly understandable way.
(b) Using a golf analogy, the problems with the banking system were presented in a fairly understandable way.
(c) Using a baseball analogy, the problems with the banking system were presented in a fairly understandable way.
(d) Using a football analogy, the problems with the banking system were presented in a fairly understandable way.

2. The banking system before the Federal Reserve System allowed banks to lend out what percentage of money against one percent in deposits.
(a) The banking system before the Federal Reserve System allowed banks to lend out more money than they held in deposits, up to twenty percent loaned out with only one percent in deposits.
(b) The banking system before the Federal Reserve System allowed banks to lend out more money than they held in deposits, up to ninety-nine percent loaned out with only one percent in deposits.
(c) The banking system before the Federal Reserve System allowed banks to lend out more money than they held in deposits, up to sixty percent loaned out with only one percent in deposits.
(d) The banking system before the Federal Reserve System allowed banks to lend out more money than they held in deposits, up to fithy percent loaned out with only one percent in deposits.

3. What economic group is hit the hardest by an inflation?
(a) Only the middle class is hurt by inflation.
(b) Inflation damages only the very poor in a society.
(c) Only the very wealthiest people are hurt by inflation.
(d) Inflation has been a problem for the rich and poor alike, although it hit the chronically poor harder than anyone.

4. What has caused the economy's boom-bust cycle?
(a) The Federal Reserve's advertised purpose was to stabilize the economy, but depressions and recessions have resulted instead in a boom-bust cycle.
(b) The economy's boom-bust cycle is caused by the instability of the International Monetary Fund.
(c) The economy's boom-bust cycle is caused from people hoarding cash.
(d) The economy's boom-bust cycle is caused from trade deficits.

5. How does a currency drain occur within the banking system?
(a) 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.
(b) A currency drain occurs when the government devalues the currency system.
(c) A currency drain occurs when the Federal government demands repayment of loans.
(d) A currency drain occurs when foreign investors withdrawn their funds from US banks.