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This test consists of 5 short answer questions, 10 short essay questions, and 1 (of 3) essay topics.

Short Answer Questions

1. The Federal Reserve System was designed to control what element of member banks?

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

3. Why did banks make risky loans?

4. When did the American public become interested in socialism as an alternative to capitalism?

5. Why did banks ask for interest-only payments?

Short Essay Questions

1. According to Chapter 2, how did people react to the creation of new money?

2. In Chapter 3, what was the result of the 1970 Penn Central Railroad bailout?

3. In Chapter 1, how is a "public run" defined?

4. In Chapter 4, how was the employment picture beginning to change?

5. According to Chapter 1, what was the main purpose of the Federal Reserve System?

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

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

8. In Chapter 3, what occurred when Congress stepped in during the S&L crisis?

9. According to Chapter 2, what is the Federal Deposit Insurance Corporation?

10. In Chapter 7, what impact did the Greek currency system have on the economy?

Essay Topics

Write an essay for ONE of the following topics:

Essay Topic 1

Where did the U.S. dollar originate from? What is the root source of the word "dollar?" What currency did the U.S. Congress adopt in 1785? What problems existed with the early gold standard that was used to back the monetary system?

Essay Topic 2

What city-state was the first to establish an actual banking system--a system on which modern banking is based? Discuss the establishment of early European banks. Discuss the seizure of the Bank of Hamburg.

Essay Topic 3

Describe and discuss the Mandrake Mechanism and its effect on an economy. Why was the system made to be complex?

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