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

2. 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 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 but to put economic control into the hands of a few people who agreed not to compete with one another.

3. During the history of the world, what types of things were first traded?
(a) During the history of money development, the first currency system was based on grain and livestock.
(b) During the history of money development, trade started out between neighboring communities.
(c) During the history of money development, trade started out with bartering commodities, cows traded for grain and so on.
(d) During the history of money development, trade started out with a rudimentary currency system.

4. 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 severe deflation.
(b) The temptation was too strong to simply print more money which led to economic instability.
(c) The temptation was too strong to simply print more money which led to economic stability.
(d) The temptation was too strong to simply print more money which led to severe inflation.

5. 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) New York City became a major part of the welfare state in 1975 via Federal government bailouts.
(c) Los Angeles became a major part of the welfare state in 1975 via Federal government bailouts.
(d) Chicago became a major part of the welfare state in 1975 via Federal government bailouts.

Short Answer Questions

1. When did the American public become interested in socialism as an alternative to capitalism?

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

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

4. How did the New World Order develop?

5. What organization ensures the nationalization of banks?

Short Essay Questions

1. According to Chapter 2, how did people react to the creation of new money?

2. According to Chapter 5, what resulted from the removal of the gold standard?

3. In Chapter 4, how was the employment picture beginning to change?

4. According to Chapter 4, when did Americans become interested in socialism?

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

6. In Chapter 6, why did all nations, in the author's opinion, become socialistic in the New World Order?

7. In Chapter 7, what impact did the Greek currency system have on the economy?

8. According to Chapter 7, What can result when paper money is not backed with gold or silver?

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

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

(see the answer keys)

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