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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. Why did banks offer debtors more credit?
(a) Banks offered more credit to debtors to so they could increase their purchasing power.
(b) Banks offered more credit to debtors to help them purchase homes.
(c) Banks offered more credit to debtors to increase interest payments to the them.
(d) Banks offered more credit to debtors to help improve their credit rating.

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

3. What do some feel was the reason for establishing the Federal Reserve?
(a) The Federal Reserve System was concocted to stabilize the economy.
(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 to put economic control into the hands of the people.
(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.

4. What risky loan activities have banks participated in?
(a) Banks loaned depositors' money out to poor people during the Great Depression.
(b) Banks loaned depositors' money out to risky debtors who would likely not be able to pay the loans off.
(c) Banks loaned depositors' money out to to the US government in times of economic downturns.
(d) Banks loaned depositors' money to foreign governments who refused to repay the loans.

5. Why was the "Federal Reserve System," so named?
(a) The "Federal Reserve System" was so named so that people would have respect for it.
(b) The "Federal Reserve System" was so named because its offices were not state run.
(c) The "Federal Reserve System" was so named so that people would know that it was part of the Federal government.
(d) The "Federal Reserve System" was so named so that people would think it was part of the Federal government.

Short Answer Questions

1. What happened when Congress stepped in during the S&L crisis?

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

3. What did the author argue resulted from the establishment of the IMF and World Bank and the abandonment of the gold standard?

4. How did the development of paper money begin?

5. What action was taken by the Federal Reserve during the 1980s S&L crisis?

Short Essay Questions

1. According to Chapter 3, what were some of the major organizations helped by government bailouts?

2. According to Chapter 6, how did the new world order develop?

3. In Chapter 2, how did the author characterize the problems with the banking system?

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

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

6. In Chapter 3, what was the result of the 1970 Penn Central Railroad bailout?

7. In Chapter 8, how did the development of paper money begin?

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

9. In Chapter 3, what occurred when Congress stepped in during the S&L crisis?

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

(see the answer keys)

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