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. In what year was the concept of the Federal Reserve first developed?
(a) The concept of the Federal Reserve was developed in 1920.
(b) The concept of the Federal Reserve was developed in 1952.
(c) The concept of the Federal Reserve was developed in 1910?
(d) The concept of the Federal Reserve was developed in 1966.

2. What type of person was Paul Moritz Warburg?
(a) Paul Moritz Warburg was a stubborn man concerned only with the wealth of the upper class.
(b) Paul Moritz Warburg was an elitist who was not concerned with the concerns of the poor.
(c) Paul Moritz Warburg was a mild-mannered, shy and sensitive man.
(d) Paul Moritz Warburg was a rude and greedy man.

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

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

5. 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 filed suit in Federal Court.
(b) If the debtors stopped paying altogether, the Federal Reserve System gave the banks more money.
(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.