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

Multiple Choice Questions

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

2. 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 at the 1904 World's Fair.
(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 be hatched at the 1910 Jekyll Island meeting.
(d) The conspiracy theory surrounding the Federal Reserve was thought to have originated during the Great Depression.

3. What do some feel was the reason for establishing the Federal Reserve?
(a) The Federal Reserve System was concocted not to stabilize the economy and create an economy that was distributed equally among the population.
(b) The Federal Reserve System was concocted not to stabilize the economy but to put economic control into the hands of a few people who agreed not to compete with one another.
(c) The Federal Reserve System was concocted to put economic control into the hands of the people.
(d) The Federal Reserve System was concocted to stabilize the economy.

4. 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.

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

6. How did the New World Order develop?
(a) The New World Order was an outgrowth of the international events that led up to the Great Depression of 1929.
(b) The New World Order was an outgrowth of the international events that led up to the fall of Nazism, specifically the defeat of Nazi Germany.
(c) The New World Order was an outgrowth of the international events that led up to the fall of Communism, specifically the dissolution of the USSR.
(d) The New World Order was an outgrowth of the international events that led to the defeat of the Axis powers in World War II.

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

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

9. What resulted when paper money was not backed with gold or silver?
(a) Money not backed by precious metal led to inflation and political upheaval.
(b) Money not backed by precious metal led to deflation and political upheaval.
(c) Money not backed by precious metal led to higher deficits.
(d) Money not backed by precious metal led to booming economies and political stability.

10. What monetary system did the Constitution of the newly formed United States require?
(a) When the United States was formed, the Constitution required a fractional money system.
(b) When the United States was formed, the Constitution required that all precious metal be in the control of the government.
(c) When the United States was formed, the Constitution required gold-backed money.
(d) When the United States was formed, the Constitution required a paper currency system.

11. What unreasonable conclusion does the author make about the IMF and World Bank?
(a) The IMF and World Bank are operated by those with anti-American views.
(b) Nothing the IMF or World Bank has done worked out successfully.
(c) The IMF and World Bank are corrupt organizations.
(d) The IMF and World Bank are run by political operatives.

12. What was the main cause of the economic meltdown in 2008?
(a) The lack of Congressional legislation was the main cause for the 2008 economic meltdown.
(b) Toxic assets, also known as mortgages and loans were the main cause for the 2008 economic meltdown.
(c) An unstable world economy was the main cause for the 2008 economic meltdown.
(d) The US deficit was the main cause for the 2008 economic meltdown.

13. 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.

14. What is the true function of the FDIC?
(a) The FDIC is another way to pay off the debt of the taxpayer.
(b) The FDIC is another way to support the people who use banks.
(c) The FDIC is another way to demonstrate the strength of the economy.
(d) The FDIC is another way to pay off banking mistakes through the taxpayer.

15. The author made what sports analogy to describe the problems with the banking system?
(a) Using a soccer analogy, the problems with the banking system were presented in a fairly understandable way.
(b) Using a football analogy, the problems with the banking system were presented in a fairly understandable way.
(c) Using a baseball analogy, the problems with the banking system were presented in a fairly understandable way.
(d) Using a golf analogy, the problems with the banking system were presented in a fairly understandable way.

Short Answer Questions

1. Why were S&Ls popular with those seeking loans in the 1980s?

2. Why was there skepticism about the author's analysis?

3. Why did banks ask for interest-only payments?

4. What often occurs to a conspiracy theory when deceit is not used to strengthen their case?

5. Who was the mastermind behind the Federal Reserve?

(see the answer keys)

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