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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. How did the Federal Reserve System accomplish the nationalization of banks?
(a) The politics of the Federal Reserve System became new and inventive ways to justify the nationalization of banks through the use of bailouts.
(b) The politics of the Federal Reserve System became new and inventive ways to justify the nationalization of banks through the use of risky loans.
(c) The politics of the Federal Reserve System became new and inventive ways to justify the nationalization of banks through the use of short-term loans.
(d) The politics of the Federal Reserve System became new and inventive ways to justify the nationalization of banks through the use of new legislation.

2. What events cause deflation?
(a) Deflation occurs when prices suddenly tumble.
(b) Deflation occurs when prices suddenly increase.
(c) Deflation occurs when the government takes steps against inflationary signals.
(d) Deflation occurs when the stock market suddenly tumble.

3. What happens when the Federal Reserve System prints new money?
(a) When the Federal Reserve System creates new money, it causes the stock market to rally.
(b) When the Federal Reserve System creates new money, it improves the overall economy.
(c) When the Federal Reserve System creates new money, it dilutes the value of the money already in the system.
(d) When the Federal Reserve System creates new money, it increases the value of the money already in the system.

4. Why was there skepticism about the author's analysis?
(a) The author was not considered an expert on the subject.
(b) The author refused to be questioned about his research.
(c) Doubt existed because the author's entire analysis was an exercise in historical analysis from subsequent events, which is by nature flawed due to the guesswork involved.
(d) The author was found to be a lobbyist for conservative causes.

5. How did the banks make their money?
(a) The banks made money on interest, not principle, payments.
(b) The banks made money on principle, not on interest payments.
(c) The banks made money on their cash flow.
(d) The banks made money on both interest ad principle payments.

Short Answer Questions

1. What was the main argument in favor of nationalizing banks?

2. What impacted housing prices in the Midwest states?

3. Many people feel that the economic system has been rigged to favor what group of people?

4. What is the Fabian plan?

5. What resulted from the 1970 Penn Central Railroad bailout?

(see the answer key)

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