This quiz consists of 5 multiple choice and 5 short answer questions through Section I. What Creature Is This? Chapter 2 The Name of the Game Is Bailout.

Multiple Choice Questions

1. If the debtors stopped paying banks altogether, what action would the Federal Reserve System take?
(a) If the debtors stopped paying altogether, the Federal Reserve System gave the banks more money.
(b) If the debtors stopped paying altogether, the Federal Reserve System filed suit in Federal Court.
(c) If the debtors stopped paying altogether, the Federal Reserve System fined them.
(d) If the debtors stopped paying altogether, the Federal Reserve System refused to back the bad debt.

2. Why did banks ask for interest-only payments?
(a) The bank would arrange for interest payments only to take the burden off the customer.
(b) The bank would arrange for interest payments only to keep the profits coming in.
(c) The bank would arrange for interest payments only so that their customers could keep a good credit rating>
(d) The bank would arrange for interest payments only to keep the loan viable.

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 did the U.S. government do to support banks?
(a) The U.S. government guaranteed depositor money through Congress.
(b) The U.S. government guaranteed depositor money through the FDIC.
(c) The U.S. government forgave the debot of failing banks.
(d) The U.S. government guaranteed depositor money through private insurance companies.

5. Many people feel that the economic system has been rigged to favor what group of people?
(a) People have realized, at least a little bit, that our economic system had been rigged somewhere in the past to favor the rich by stealing from the government revenues.
(b) People have realized, at least a little bit, that our economic system had been rigged somewhere in the past to favor the middle classes by stealing from the rich and poor classes.
(c) People have realized, at least a little bit, that our economic system had been rigged somewhere in the past to favor the poor by stealing from the rich and middle classes.
(d) People have realized, at least a little bit, that our economic system had been rigged somewhere in the past to favor the rich by stealing from the poor and middle classes.