View a FREE sample

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

Multiple Choice Questions

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

2. What important aspect about the economic history of the country did the author fail to mention?
(a) The author failed to mention that our economic system depends on foreign investments.
(b) The author failed to mention that our economic system is impossible to fix.
(c) The author failed to mention that our economic system depends on the success of the stock market.
(d) The author failed to mention that our economic system may have been fixed at one time and then broken again.

3. Why was platinum not used to back the monetary system?
(a) Platinum did not have the popular support of the public to become the standard for a monetary system.
(b) 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.
(c) Not enough platinum occurred in the United States to be used as the standard for a monetary system.
(d) Platinum was too scarce to be used to be the standard for a monetary system.

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

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

6. Why was housing becoming difficult to obtain in the 1980s?
(a) Congressional actions began to place restrictive regulations on house buying.
(b) Wages were not keeping up with inflation, which made housing harder to obtain.
(c) The construction industry was experiencing labor conflicts.
(d) The cost of housing was sky-rocketing.

7. What events cause deflation?
(a) Deflation occurs when the government takes steps against inflationary signals.
(b) Deflation occurs when prices suddenly tumble.
(c) Deflation occurs when prices suddenly increase.
(d) Deflation occurs when the stock market suddenly tumble.

8. 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 at the 1904 World's Fair.
(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 FDR's administration.

9. 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 to file individual bankruptcies.
(d) Government regulations allowed S&Ls did not require them to repay their debtors in full.

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

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

12. What major banks failed in 1972?
(a) In 1972, Bank of America and Citibank failed.
(b) In 1972, First Bank of Michigan and New York Bank both failed.
(c) First Bank of California and Wells Fargo Bank failed in 1972.
(d) Unity Bank fell in 1972, as did the Commonwealth Bank of Detroit.

13. Prior to the establishment of the Federal Reserves, what caused massive bank failures?
(a) US bonds were devalued by the Federal authorities.
(b) Foreign debtors demanded the full repayment of loands.
(c) There were public runs on the banks and currency drains from other banks demanding payments.
(d) The Great Depression proved to be an unbearable strain on the banking system.

14. What do many people feel was the real reason behind the establishment of the Federal Reserve?
(a) Many feel that the real reason for creating the Federal Reserve was to keep the middle class from failing.
(b) Many feel that the real reason for creating the Federal Reserve was to keep poor people from turning to crime.
(c) Many feel that the real reason for creating the Federal Reserve was to keep rich people in power.
(d) Many feel that the real reason for creating the Federal Reserve was to keep the rich from becoming too powerful.

15. 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) Only some of the participants at the 1910 meeting talked about the establishment of the Federal Reserve in interviews conducted years later.
(d) Most of the participants at the 1910 meeting openly talked about the establishment of the Federal Reserve in interviews conducted years later.

Short Answer Questions

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

2. Conspiracy theorists connected the potential of world socialism to what organization?

3. Why has bank fraud never been eliminated?

4. What does the FDIC stand for?

5. What was the relationship between the World Bank and the IMF?

(see the answer keys)

This section contains 1,402 words (approx. 5 pages at 300 words per page) View a FREE sample