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. 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 rich people in power.
(b) Many feel that the real reason for creating the Federal Reserve was to keep the middle class from failing.
(c) Many feel that the real reason for creating the Federal Reserve was to keep the rich from becoming too powerful.
(d) Many feel that the real reason for creating the Federal Reserve was to keep poor people from turning to crime.

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

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 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.
(d) The Federal Reserve System was concocted to put economic control into the hands of the people.

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

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