This quiz consists of 5 multiple choice and 5 short answer questions through Section II. A Crash Course on Money, Chapters 7-8 The Barbaric Metal; Fool's Gold.

Multiple Choice Questions

1. What is the true function of the FDIC?
(a) The FDIC is another way to pay off banking mistakes through the taxpayer.
(b) The FDIC is another way to demonstrate the strength of the economy.
(c) The FDIC is another way to pay off the debt of the taxpayer.
(d) The FDIC is another way to support the people who use banks.

2. What did the U.S. government do to support banks?
(a) The U.S. government guaranteed depositor money through Congress.
(b) The U.S. government guaranteed depositor money through the FDIC.
(c) The U.S. government guaranteed depositor money through private insurance companies.
(d) The U.S. government forgave the debot of failing banks.

3. What resulted when paper money was not backed with gold or silver?
(a) Money not backed by precious metal led to inflation and political upheaval.
(b) Money not backed by precious metal led to deflation and political upheaval.
(c) Money not backed by precious metal led to higher deficits.
(d) Money not backed by precious metal led to booming economies and political stability.

4. How did poor regulation contribute to the Savings and Loan crisis of the 1980s?
(a) Government regulations allowed S&Ls to claim assets that had no value, such as community good will toward them, and encouraged bad lending practices to increase home ownership.
(b) Government regulations allowed S&Ls did not require them to repay their debtors in full.
(c) Government regulations allowed S&Ls to file individual bankruptcies.
(d) Government regulations allowed S&Ls to hoard money to increase their cash flow.

5. What happened when Congress stepped in during the S&L crisis?
(a) When Congress did step in, it forced the S&Ls to sell off all their junk bond holdings.
(b) When Congress did step in, it forced the S&Ls to refund depositors at fifty percent.
(c) When Congress did step in, it forced the S&Ls to make their holdings public.
(d) When Congress did step in, it forced the S&Ls to sell all their assets.