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

2. What is the fundamental basis of capitalism?
(a) The main idea behind capitalism was investment and return on investment.
(b) The main idea behind capitalism was making investments in foreign interests.
(c) The main idea behind capitalism was providing welfare to the less fortunate.
(d) The main idea behind capitalism was making money and hoarding cash.

3. What resulted from the 1970 Penn Central Railroad bailout?
(a) The 1970 Penn Central Railroad bailout resulted in government-owned Amtrak and privately owned Conrail.
(b) Travel in the US decreased as a result of the bailout.
(c) More roads were built by the government as a result of the bailout.
(d) Air traffic increased after the bailout.

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. Why did banks offer debtors more credit?
(a) Banks offered more credit to debtors to increase interest payments to the them.
(b) Banks offered more credit to debtors to so they could increase their purchasing power.
(c) Banks offered more credit to debtors to help them purchase homes.
(d) Banks offered more credit to debtors to help improve their credit rating.

Short Answer Questions

1. The author made what sports analogy to describe the problems with the banking system?

2. What important aspect about the economic history of the country did the author fail to mention?

3. The nationalization of banks has occurred during conservative or liberal administrations?

4. What unreasonable conclusion does the author make about the IMF and World Bank?

5. What U.S. president removed the gold standard from the US dollar?

(see the answer key)

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