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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 is the status of a loan that is "underwater?"
(a) When a home loan is underwater, the homeowner owns more on the home than it is worth on the market.
(b) When a home loan is underwater, the homeowner is forced into foreclosure by the lender.
(c) When a home loan is underwater, the homeowner must take out a second mortgage.
(d) When a home loan is underwater, the homeowner is forced into bankruptcy.

2. What was the main cause of the economic meltdown in 2008?
(a) The US deficit was the main cause for the 2008 economic meltdown.
(b) The lack of Congressional legislation was the main cause for the 2008 economic meltdown.
(c) An unstable world economy was the main cause for the 2008 economic meltdown.
(d) Toxic assets, also known as mortgages and loans were the main cause for the 2008 economic meltdown.

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 to put economic control into the hands of the people.
(d) 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.

4. How is the Federal Reserve System reviewed in general?
(a) The Federal Reserve System had become the economic leader of the country.
(b) The Federal Reserve System had become the nation's first source of lending.
(c) The Federal Reserve System had become known to have the strictest lending standards.
(d) The Federal Reserve System had become the lender of last resort.

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

Short Answer Questions

1. After analysis, what was the real nature of the S&L system?

2. What country contributed the largest investment in the IMF?

3. What did the author argue resulted from the establishment of the IMF and World Bank and the abandonment of the gold standard?

4. Conspiracy theorists connected the potential of world socialism to what organization?

5. What often occurs to a conspiracy theory when deceit is not used to strengthen their case?

Short Essay Questions

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

2. According to Chapter 1, where did the idea for the Federal Reserve System originate?

3. According to Chapter 5, what US president abandoned the gold standard from the US dollar?

4. According to Chapter 5, what was the relationship between the UN and the World Bank and IMF?

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

6. In Chapter 6, why did all nations, in the author's opinion, become socialistic in the New World Order?

7. According to Chapter 4, what presidential action may have contributed to the economic woes?

8. According to Chapter 3, what were some of the major organizations helped by government bailouts?

9. In Chapter 2, how did the author characterize the problems with the banking system?

10. According to Chapter 3, how did the government help the Lockheed Corporation?

(see the answer keys)

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