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

Multiple Choice Questions

1. Some tactics include cherry-picking examples while oversimplifying causes.
(a) One tactic is cherry-picking examples while oversimplifying causes.
(b) One tactic is providing great detail about their causes.
(c) One tactic is having others provide testimonials on their behalf.
(d) One tactic is to accuse others of lying about the facts.

2. What is the Fabian plan?
(a) The Fabian plan involved making the entire world a capitalistic society.
(b) The Fabian plan had to do with making the world one big socialized government.
(c) The Fabian plan had to do with making the world a world without political .
(d) The Fabian plan had to do with making the world one big democracy.

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

4. What country contributed the largest investment in the IMF?
(a) Member nations contributed to the IMF, with the European Union giving the most.
(b) Member nations contributed to the IMF, with the US giving the most.
(c) Member nations contributed to the IMF, with the Soviet Union giving the most.
(d) Member nations contributed to the IMF, with England giving the most.

5. What is the definition of a public run on a bank?
(a) A public run is when the government puts a bank up for sale.
(b) A public run was when many depositors demanded their cash from a bank and wiped out the bank's reserves.
(c) A public run occurs when the Federal government takes ownership of a bank.
(d) A public run occurs when a bank runs out of cash.

6. What generalization did the author make about conspiracy theorists?
(a) There were two kinds of people in the world--those who believed in conspiracy and those who did not.
(b) Those who believe in conspiracy theories are usually more well-informed than most people.
(c) Conspiracy theorists are generally more intelligent than the general population.
(d) Those who believe in conspiracy theories usually are better educated than the average person.

7. The nationalization of banks has occurred during conservative or liberal administrations?
(a) The nationalization of banks occurred during liberal administrations.
(b) The nationalization of banks occurred during conservative administrations.
(c) The nationalization of banks occurred when there is equal balance among all branches of government.
(d) The nationalization of banks occurred during conservative as well as liberal administrations.

8. What organization ensures the nationalization of banks?
(a) As long as the FDIC existed, it would continue nationalizing banks and perhaps other industries as they fell into financial difficulties.
(b) As long as the Federal Reserve System existed, it would continue nationalizing banks and perhaps other industries as they fell into financial difficulties.
(c) As long as the Congressional Banking Committee existed, it would continue nationalizing banks and perhaps other industries as they fell into financial difficulties.
(d) As long as the International Monetary Fund existed, it would continue nationalizing banks and perhaps other industries as they fell into financial difficulties.

9. 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) More roads were built by the government as a result of the bailout.
(c) Air traffic increased after the bailout.
(d) Travel in the US decreased as a result of the bailout.

10. 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 a weak economy would recover more quickly.
(d) 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.

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

12. What redistribution of wealth occurred as a result of the establishment of the IMF and the World Bank?
(a) It was an effective means of redistributing wealth from rich to poor nations.
(b) It was an effective means of redistributing wealth to the rich nations.
(c) It was an effective means of redistributing wealth from the middle class to the rich.
(d) It was an effective means of redistributing wealth to the rich to the middle class.

13. What importance does political ideology have on the nationalization of banks?
(a) Liberal ideologues have the great influence on bank legislation.
(b) The nationalization of banks is such a strong part of the overall economy that political ideology did not matter.
(c) The Congressional chairman of the Banking Committee influences support for nationalization.
(d) Political lobbyists for banks have great influence on their nationalization.

14. How open to questioning were the original participants of the 1910 meeting?
(a) None of the participants at the 1910 meeting talked about the establishment of the Federal Reserve in interviews conducted years later.
(b) The participants at the 1910 meeting would only agree to talk about the establishment of the Federal Reserve with the New York Times.
(c) Most of the participants at the 1910 meeting openly talked about the establishment of the Federal Reserve in interviews conducted years later.
(d) Only some of the participants at the 1910 meeting talked about the establishment of the Federal Reserve in interviews conducted years later.

15. How was the nationalization of banks justified?
(a) Nationalization was necessary for the nation's standing in the world.
(b) Nationalization was necessary for the IMF.
(c) Nationalization was necessary for the banking industry.
(d) Nationalization was necessary for the public good.

Short Answer Questions

1. What risky loan activities have banks participated in?

2. In what year was First Pennsylvania Bank bailed out?

3. What is a fractional money system?

4. What was the impact of the creation of new money on the currency?

5. How did poor regulation contribute to the Savings and Loan crisis of the 1980s?

(see the answer keys)

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