View a FREE sample

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

Multiple Choice Questions

1. What resulted after the first electronic run on banks in 1983?
(a) The first electronic run on banks happened in 1983, leading to a collapse of the economy.
(b) The first electronic run on banks happened in 1983, leading to a massive bailout in the $6 billion range.
(c) The first electronic run on banks happened in 1983, leading to a hoarding of cash.
(d) The first electronic run on banks happened in 1983, leading to one trillion dollars being added to the deficit.

2. If the debtors stopped paying banks altogether, what action would the Federal Reserve System take?
(a) If the debtors stopped paying altogether, the Federal Reserve System gave the banks more money.
(b) If the debtors stopped paying altogether, the Federal Reserve System refused to back the bad debt.
(c) If the debtors stopped paying altogether, the Federal Reserve System filed suit in Federal Court.
(d) If the debtors stopped paying altogether, the Federal Reserve System fined them.

3. What was a fundamental flaw in a paper money system not backed by gold?
(a) The temptation was too strong to simply print more money which led to economic instability.
(b) The temptation was too strong to simply print more money which led to severe deflation.
(c) The temptation was too strong to simply print more money which led to severe inflation.
(d) The temptation was too strong to simply print more money which led to economic stability.

4. 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 new legislation.
(b) The politics of the Federal Reserve System became new and inventive ways to justify the nationalization of banks through the use of bailouts.
(c) The politics of the Federal Reserve System became new and inventive ways to justify the nationalization of banks through the use of risky loans.
(d) 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.

5. What may have contributed to the problems of the S&Ls in the 1980s?
(a) Inflation was steady but the deficit was rapidly growing.
(b) Inflation was in the double-digits and real estate prices were going up rapidly.
(c) Inflation was in the double-digits and real estate prices were going rapidly decreasing.
(d) Deflation was in the double-digits and real estate prices were going up rapidly.

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

7. During which president's administration were policies that were a hybrid of socialism and capitalism developed?
(a) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during the Truman administration.
(b) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during the Eisenhower administration.
(c) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during the Nixon administration.
(d) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during Franklin D. Roosevelt's administration.

8. What impact does deflation have on individuals who are repaying loans?
(a) Deflation causes people to repay more value on loans taken out during a bear market.
(b) Deflation causes people to repay more value on loans taken out during inflationary times.
(c) Deflation causes people to repay more value on loans taken out during a bull market.
(d) Deflation causes people to repay more value on loans during an economic downturn.

9. In what year was the concept of the Federal Reserve first developed?
(a) The concept of the Federal Reserve was developed in 1910?
(b) The concept of the Federal Reserve was developed in 1966.
(c) The concept of the Federal Reserve was developed in 1920.
(d) The concept of the Federal Reserve was developed in 1952.

10. What is laudable about the author's work?
(a) The author did provide a convincing argument that our economic system had been broken at some time in the past.
(b) The author had majored in international economics.
(c) The author provided a clear and concise conservative viewpoint.
(d) The author provided a clear and concise liberal viewpoint.

11. Conspiracy theorists connected the potential of world socialism to what organization?
(a) This conspiracy theory encompassed the entire world by connecting the IMF with socialism.
(b) This conspiracy theory encompassed the entire world by connecting the World Bank with socialism.
(c) This conspiracy theory encompassed the entire world by connecting the Federal Reserve with socialism.
(d) This conspiracy theory encompassed the entire world by connecting the United Nations with socialism.

12. What often occurs to a conspiracy theory when deceit is not used to strengthen their case?
(a) Without using deceit, conspiracy theories usually stand on their own merit.
(b) Without the use of evasive tactics, the conspiracy theories often fall apart in their early stages of development.
(c) Without using deceit, conspiracy theories are often debated in a higher education venue.
(d) Without using deceit, conspiracy theories are proven on the arena of public opinion.

13. What caused the economy to get into such a state that the government was compelled to bail out banks?
(a) The American people were taking out too many home loans.
(b) The International Monetary Fund had become dangerously unstable.
(c) The argument could be made that lax lending practices and overly speculative investments had forced the government to use tax dollars in the bailouts.
(d) The US Congress failed to pass legislation that would have boosted the economy.

14. Why was the "Federal Reserve System," so named?
(a) The "Federal Reserve System" was so named so that people would have respect for it.
(b) The "Federal Reserve System" was so named so that people would know that it was part of the Federal government.
(c) The "Federal Reserve System" was so named so that people would think it was part of the Federal government.
(d) The "Federal Reserve System" was so named because its offices were not state run.

15. What city became a major part of the welfare state in 1975?
(a) Atlanta became a major part of the welfare state in 1975 via Federal government bailouts.
(b) Chicago became a major part of the welfare state in 1975 via Federal government bailouts.
(c) New York City became a major part of the welfare state in 1975 via Federal government bailouts.
(d) Los Angeles became a major part of the welfare state in 1975 via Federal government bailouts.

Short Answer Questions

1. What countries did the author point to as failures of the IMF and World Bank?

2. What did the U.S. government do to support banks?

3. How do conspiracy theorists strengthen their stands?

4. What is the fundamental basis of capitalism?

5. What resulted when paper money was not backed with gold or silver?

(see the answer keys)

This section contains 1,357 words (approx. 5 pages at 300 words per page) View a FREE sample