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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. What did the author feel was the ultimate goal in establishing the IMF and the World Bank?
(a) The ultimate goal was to put the United Nations in control of world currency.
(b) The ultimate goal was to establish the US dollar as the single world currency.
(c) The ultimate goal was to establish the Euro as the single world currency.
(d) The ultimate goal was to bring about a single world government that had control of all currencies.

2. What countries did the author point to as failures of the IMF and World Bank?
(a) The author used Venezuela, Chili, Cuba and Uraguay as examples of IMF and World Bank failures.
(b) The author used Tanzania, Argentina, Brazil and Mexico as examples of IMF and World Bank failures.
(c) The author used The Sudan, China, Pakistan and Afghanistan as examples of IMF and World Bank failures.
(d) The author used Greece, Ireland, Italy and Kirghistan as examples of IMF and World Bank failures.

3. Why was platinum not used to back the monetary system?
(a) Platinum was too scarce to be used to be the standard for a monetary system.
(b) Not enough platinum occurred in the United States to be used as the standard for a monetary system.
(c) Platinum did not have the popular support of the public to become the standard for a monetary system.
(d) There were myths about platinum and many questioned its real value making it unacceptable to be used to be the standard for a monetary system.

4. What did the author argue resulted from the establishment of the IMF and World Bank and the abandonment of the gold standard?
(a) The author maintained that these were further steps toward world socialism that resulted in mass murders, famine and economically destroyed countries.
(b) The author maintained that these were further steps toward establishing the United Nations as the world's preeminent authority that resulted in mass murders, famine and economically destroyed countries.
(c) The author maintained that these were further steps toward world socialism that resulted in mass murders, famine and economically destroyed countries.
(d) The author maintained that these were further steps toward a world dictatorship that resulted in mass murders, famine and economically destroyed countries.

5. What does the FDIC stand for?
(a) The FDIC stands for The Federal Deposit Insurance Corporation.
(b) The FDIC stands for The First Depositor's Insurance Corporation.
(c) The FDIC stands for The Federal Debt Issuers Company.
(d) The FDIC stands for The First Debt Institute of Connneticut.

6. What was the relationship between the World Bank and the IMF?
(a) The IMF and World Bank were closely associated with the United Nations.
(b) The IMF and World Bank were a division of the United Nations.
(c) The IMF and World Bank were associated with but not tied directly to the United Nations.
(d) The IMF and World Bank were controlled by the United Nations.

7. This conspiracy theory about the Federal Reserve pointed the finger at the meeting on Jekyll Island that occurred in 1910.
(a) The conspiracy theory surrounding the Federal Reserve was thought to have originated during the Great Depression.
(b) The conspiracy theory surrounding the Federal Reserve was thought to have originated during FDR's administration.
(c) The conspiracy theory surrounding the Federal Reserve was thought to have originated at the 1904 World's Fair.
(d) The conspiracy theory surrounding the Federal Reserve was thought to be hatched at the 1910 Jekyll Island meeting.

8. 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 purge the system of fraud and abuse.
(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 it would cause less unemployment.
(d) 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.

9. When did the American public become interested in socialism as an alternative to capitalism?
(a) During the Great Depression of the 1930s, the American public became interested in socialism as an alternative to capitalism.
(b) During the Cold War, the American public became interested in socialism as an alternative to capitalism.
(c) After LBJ's Great Society was enacted, the American public became interested in socialism as an alternative to capitalism.
(d) After World War II, the American public became interested in socialism as an alternative to capitalism.

10. In what year was First Pennsylvania Bank bailed out?
(a) First Pennsylvania Bank was bailed out in 1973.
(b) First Pennsylvania Bank was bailed out in 1972.
(c) First Pennsylvania Bank was bailed out in 1980.
(d) First Pennsylvania Bank was bailed out in 1975.

11. Since its inception in 1910, the Federal Reserve had made what decisions about bank bailouts?
(a) Since its inception in 1910, the Federal Reserve had decided that large banks would get bailouts only if they could prove they had complied with all regulations.
(b) Since its inception in 1910, the Federal Reserve had decided that large banks would get bailouts, medium-sized banks would get some bailouts, and small banks would be left to fail or be acquired by larger banks.
(c) Since its inception in 1910, the Federal Reserve had decided that medium-sized banks would get the majority of bailouts.
(d) Since its inception in 1910, the Federal Reserve had decided that large banks would be the only banks to get bailouts.

12. Why was gold considered the ideal metal behind a monetary system?
(a) Gold was considered the perfect metal because it was the most sought after of the precious metals.
(b) Gold was considered the perfect metal because it was the most common of the precious metals.
(c) Gold was considered the perfect metal because of its intrinsic value and scarcity throughout history.
(d) Gold was considered the perfect metal because of its value and availability.

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

14. 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 to hoard money to increase their cash flow.
(c) Government regulations allowed S&Ls did not require them to repay their debtors in full.
(d) Government regulations allowed S&Ls to file individual bankruptcies.

15. How did many people feel about those who went too far into debt?
(a) Many argued that people who went too far into debt had done this on their own--nobody had forced people into the mortgages or credit cards.
(b) Many argued that those in deep debt should be forgiven much of their dept because of the reclining economy.
(c) Many felt that the nation had been taught to rely too much on credit.
(d) Many felt that people who were in debt had been encouraged to do so by political figures.

Short Answer Questions

1. What has caused the economy's boom-bust cycle?

2. What impacted housing prices in the Midwest states?

3. How did the government provide economic support to Lockheed Corporation in 1970?

4. What historic reference is contained in this chapter?

5. If the debtors stopped paying banks altogether, what action would the Federal Reserve System take?

(see the answer keys)

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