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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. What often occurs to a conspiracy theory when deceit is not used to strengthen their case?
(a) Without the use of evasive tactics, the conspiracy theories often fall apart in their early stages of development.
(b) Without using deceit, conspiracy theories usually stand on their own merit.
(c) Without using deceit, conspiracy theories are proven on the arena of public opinion.
(d) Without using deceit, conspiracy theories are often debated in a higher education venue.

2. What culture was the first to create a currency system based on gold and silver?
(a) The ancient Romans came up with the idea to make coins out of gold and silver.
(b) The ancient Greeks came up with the idea to make coins out of gold and silver.
(c) The British came up with the idea to make coins out of gold and silver.
(d) Alexander the Great came up with the idea to make coins out of gold and silver.

3. What economic group is hit the hardest by an inflation?
(a) Inflation has been a problem for the rich and poor alike, although it hit the chronically poor harder than anyone.
(b) Only the middle class is hurt by inflation.
(c) Inflation damages only the very poor in a society.
(d) Only the very wealthiest people are hurt by inflation.

4. What resulted after the first electronic run on banks in 1983?
(a) The first electronic run on banks happened in 1983, leading to a collapse of the economy.
(b) The first electronic run on banks happened in 1983, leading to one trillion dollars being added to the deficit.
(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 a hoarding of cash.

5. How did many people feel about those who went too far into debt?
(a) Many argued that people who went too far into debt had done this on their own--nobody had forced people into the mortgages or credit cards.
(b) Many argued that those in deep debt should be forgiven much of their dept because of the reclining economy.
(c) Many felt that people who were in debt had been encouraged to do so by political figures.
(d) Many felt that the nation had been taught to rely too much on credit.

Short Answer Questions

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

2. What impact does deflation have on individuals who are repaying loans?

3. What occurred when coinage was weakened through lower percentages of precious metal or completing stripped of such backing?

4. What happened to many homeowners when the housing market bubble burst?

5. What is the true function of the FDIC?

Short Essay Questions

1. In Chapter 2, why did banks make risky loans?

2. In Chapter 8, what did the issuance of the first paper money lead to?

3. According to Chapter 4, when did Americans become interested in socialism?

4. According to Chapter 7, what culture was the first to create a currency system based on gold and silver?

5. According to Chapter 3, the nationalization of banks is more likely to occur under conservative or liberal administrations?

6. According to Chapter 6, how did the new world order develop?

7. According to Chapter 1, what were banks allowed to lend prior to the establishment of the Federal Reserve System?

8. According to Chapter 4, what caused the Savings & Loan crisis of the 1980s?

9. In Chapter 3, what is the first bailout that is covered in this book?

10. In Chapter 2, how did the banks make their money?

(see the answer keys)

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