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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. How did unemployment impact the economic problems?
(a) High employment distracted people from looking for homes.
(b) The Federal government was distracted from economic problems and focused their attention on the unemployed.
(c) High unemployment compounded this problem, forcing people into foreclosures and drying up the housing market.
(d) High employment made more homes available for sale.

2. What is a fractional money system?
(a) A fractional money system is one in which paper money was initially backed by gold but was later diluted as more paper money was printed.
(b) A fractional money system is one in which paper money was initially backed by gold but was later diluted when the gold was invested in foreign interests.
(c) A fractional money system is one in which paper money was initially backed by gold but was later diluted with the backing of silver.
(d) A fractional money system is one in which paper money was initially backed by gold but was later diluted when the gold was devalued.

3. What major banks failed in 1972?
(a) In 1972, Bank of America and Citibank failed.
(b) Unity Bank fell in 1972, as did the Commonwealth Bank of Detroit.
(c) In 1972, First Bank of Michigan and New York Bank both failed.
(d) First Bank of California and Wells Fargo Bank failed in 1972.

4. What is the author's main complaint?
(a) Central to the author's thesis was that a few scheming people were constantly and consistently strapping the Federal Reserve with the costs of the bad loans.
(b) Central to the author's thesis was that a few scheming people were constantly and consistently strapping the IMF with the costs of the bad loans.
(c) Central to the author's thesis was that a few scheming people were constantly and consistently strapping the taxpayer with the costs of the bad loans.
(d) Central to the author's thesis was that a few scheming people were constantly and consistently strapping the government with the costs of the bad loans.

5. When were the International Monetary Fund and World Bank established?
(a) The World Bank and International Monetary Fund were established in 1929 when the Stock Market crashed.
(b) In 1944, the Bretton Woods Conference took place, out of which came the International Monetary Fund or IMF and World Bank
(c) The World Bank and International Monetary Fund were established during the Cold War.
(d) The World Bank and International Monetary Fund were established in 1910 at Jekyll Island.

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

7. The nationalization of banks has occurred during conservative or liberal administrations?
(a) The nationalization of banks occurred when there is equal balance among all branches of government.
(b) The nationalization of banks occurred during liberal administrations.
(c) The nationalization of banks occurred during conservative as well as liberal administrations.
(d) The nationalization of banks occurred during conservative administrations.

8. What monetary system did the Constitution of the newly formed United States require?
(a) When the United States was formed, the Constitution required a paper currency system.
(b) When the United States was formed, the Constitution required that all precious metal be in the control of the government.
(c) When the United States was formed, the Constitution required gold-backed money.
(d) When the United States was formed, the Constitution required a fractional money system.

9. What resulted after the first electronic run on banks in 1983?
(a) The first electronic run on banks happened in 1983, leading to a hoarding of cash.
(b) The first electronic run on banks happened in 1983, leading to a collapse of the economy.
(c) The first electronic run on banks happened in 1983, leading to a massive bailout in the $6 billion range.
(d) The first electronic run on banks happened in 1983, leading to one trillion dollars being added to the deficit.

10. 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 poor by stealing from the rich and middle classes.
(b) 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.
(c) 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.
(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 government revenues.

11. What generalization did the author make about conspiracy theorists?
(a) Those who believe in conspiracy theories are usually more well-informed than most people.
(b) There were two kinds of people in the world--those who believed in conspiracy and those who did not.
(c) Those who believe in conspiracy theories usually are better educated than the average person.
(d) Conspiracy theorists are generally more intelligent than the general population.

12. How did the government provide economic support to Lockheed Corporation in 1970?
(a) In 1970, Lockheed Corporation was forgiven of all defense-related debt.
(b) In 1970, Lockheed Corporation was made a unit of the Defense Department.
(c) In 1970, the US government agreed to pay Lockheed Corporation twenty-percent over their selling prices.
(d) In 1970, Lockheed Corporation had troubles and became a prime government contractor, another way of nationalizing private industry.

13. What happened when a debtor defaulted on a loan?
(a) When a debtor defaulted on a loan, he would ask the government for a guaranteed loan.
(b) When a debtor defaulted on a loan, he would first ask for more time to pay.
(c) When a debtor defaulted on a loan, he would ask loan payments be waived.
(d) When a debtor defaulted on a loan, he would stop making payments.

14. During which president's administration were policies that were a hybrid of socialism and capitalism developed?
(a) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during the Nixon administration.
(b) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during the Truman administration.
(c) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during the Eisenhower administration.
(d) The American public's interest in socialism brought about policies that were a hybrid of socialism and capitalism during Franklin D. Roosevelt's administration.

15. What U.S. president removed the gold standard from the US dollar?
(a) President Wilson took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.
(b) President Lincoln took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.
(c) President Nixon took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.
(d) President Kennedy took the U.S. dollar off its gold backing so that dollars could not be redeemed for gold.

Short Answer Questions

1. What important aspect about the economic history of the country did the author fail to mention?

2. What resulted from the 1970 Penn Central Railroad bailout?

3. What unreasonable conclusion does the author make about the IMF and World Bank?

4. How do conspiracy theorists strengthen their stands?

5. What importance does political ideology have on the nationalization of banks?

(see the answer keys)

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