This quiz consists of 5 multiple choice and 5 short answer questions through Section III. The New Alchemy, Chapters 11-12 The Rothschild Formula; Sink the Lusitania!.

Multiple Choice Questions

1. What was the main argument in favor of nationalizing banks?
(a) The fundamental argument in favor of the nationalization was that the system had to be purged of risk-taking bank executives.
(b) The fundamental argument in favor of the nationalization was that such bailouts would be allowed only once.
(c) The fundamental argument in favor of the nationalization was that the system was so broken that it simply could not be regulated enough to work without eventually nationalizing all banking and industry.
(d) The fundamental argument in favor of the nationalization was that a weak economy would recover more quickly.

2. Why did banks make risky loans?
(a) The US Congress passed legislation that required banks to make ten percent of their loans to risky borrowers.
(b) Banks did not thoroughly check out the risk factor of some borrowers.
(c) The banks had incentive in terms of high profits for granting mortgages to home buyers who would not be able to pay the loans off, but who might be able to make interest payments.
(d) Banks are required by the Federal Reserve to make a certain percentage of risky loans.

3. What happened when a debtor defaulted on a loan?
(a) When a debtor defaulted on a loan, he would ask the government for a guaranteed loan.
(b) When a debtor defaulted on a loan, he would stop making payments.
(c) When a debtor defaulted on a loan, he would ask loan payments be waived.
(d) When a debtor defaulted on a loan, he would first ask for more time to pay.

4. What was one of the strongest arguments in favor of bank regulation versus nationalization?
(a) An argument in favor of regulation was that it would cause less unemployment.
(b) An argument in favor of regulation was that the American people felt uncomfortable with nationalization.
(c) An argument in favor of regulation was that, when properly administered, it had worked from the time of Franklin D. Roosevelt (President of the US from 1933 to 1945) to 1970.
(d) An argument in favor of regulation was that it would purge the system of fraud and abuse.

5. What U.S. president removed the gold standard from the US dollar?
(a) President Kennedy took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.
(b) President Nixon took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.
(c) President Wilson took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.
(d) President Lincoln took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.