This quiz consists of 5 multiple choice and 5 short answer questions through Section II. A Crash Course on Money, Chapters 7-8 The Barbaric Metal; Fool's Gold.

Multiple Choice Questions

1. What was the main argument in favor of nationalizing banks?
(a) The fundamental argument in favor of the nationalization was that a weak economy would recover more quickly.
(b) The fundamental argument in favor of the nationalization was that such bailouts would be allowed only once.
(c) The fundamental argument in favor of the nationalization was that the system had to be purged of risk-taking bank executives.
(d) The fundamental argument in favor of the nationalization was that the system was so broken that it simply could not be regulated enough to work without eventually nationalizing all banking and industry.

2. What action was taken by the Federal Reserve during the 1980s S&L crisis?
(a) The Federal Reserve System usurped the powers of Congress and began crafting legislation to bail out the S&Ls.
(b) The Federal Reserve System usurped the powers of Congress and started handing out money directly to the S&Ls as well.
(c) The Federal Reserve System usurped the powers of Congress and declared that the S&Ls had the same rights as banks.
(d) The Federal Reserve System usurped the powers of Congress and forgave the S&Ls their debts.

3. What was one of the strongest arguments in favor of bank regulation versus nationalization?
(a) An argument in favor of regulation was that it would cause less unemployment.
(b) An argument in favor of regulation was that, when properly administered, it had worked from the time of Franklin D. Roosevelt (President of the US from 1933 to 1945) to 1970.
(c) An argument in favor of regulation was that it would purge the system of fraud and abuse.
(d) An argument in favor of regulation was that the American people felt uncomfortable with nationalization.

4. The Federal Reserve System was designed to control what element of member banks?
(a) The Federal Reserve System was designed to control a bank's cash flow.
(b) The Federal Reserve System was designed to control how much reserve cash a bank can invest in its expansion.
(c) The Federal Reserve System was designed to control how much reserve cash any member bank had to keep on hand.
(d) The Federal Reserve System was designed to control a bank's ability to make loans.

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