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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. Who does the Federal Reserve depend on to bail out the country in times of economic collapse?
(a) The Federal Reserve turns to Congress to bail out the country in times of economic collapse.
(b) The Federal Reserve turns to the banks to bail out the country in times of economic collapse.
(c) The Federal Reserve turns to the taxpayer to bail out the country in times of economic collapse.
(d) The Federal Reserve turns to the foreign investors to bail out the country in times of economic collapse.

2. What happened when a debtor defaulted on a loan?
(a) When a debtor defaulted on a loan, he would first ask for more time to pay.
(b) When a debtor defaulted on a loan, he would ask loan payments be waived.
(c) When a debtor defaulted on a loan, he would stop making payments.
(d) When a debtor defaulted on a loan, he would ask the government for a guaranteed loan.

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

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

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

Short Answer Questions

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

2. What redistribution of wealth occurred as a result of the establishment of the IMF and the World Bank?

3. How do conspiracy theorists strengthen their stands?

4. What may have contributed to the problems of the S&Ls in the 1980s?

5. How did the New World Order develop?

Short Essay Questions

1. According to Chapter 3, how did the government help the Lockheed Corporation?

2. In Chapter 1, how is a "public run" defined?

3. According to Chapter 5, what was the relationship between the UN and the World Bank and IMF?

4. According to Chapter 4, what caused the Savings & Loan crisis of the 1980s?

5. According to Chapter 2, what is the Federal Deposit Insurance Corporation?

6. According to Chapter 5, what US president abandoned the gold standard from the US dollar?

7. According to Chapter 5, what country contributed the largest investment in the IMF?

8. In Chapter 8, what did the issuance of the first paper money lead to?

9. According to Chapter 7, how did modern monetary systems originate historically?

10. In Chapter 2, how did the banks make their money?

(see the answer keys)

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