In Fed We Trust by David Wessel

1. In Fed We Trust: Ben Bernanke's War on the Great Panic is a compelling exploration of the unprecedented measures taken by the Federal Reserve in response to the 2008 financial crisis, authored by David Wessel. The book delves into the pivotal role played by then-Fed Chairman Ben Bernanke, who drew upon his extensive knowledge of the Great Depression and the limits of monetary policy to navigate the economy through tumultuous waters. Wessel provides a detailed account of the tools employed by the Fed, such as quantitative easing and emergency lending facilities, while also illuminating the debates and controversies that surrounded these actions. The narrative is rich with insights into the Fed's inner workings, the challenges faced by policymakers, and the profound effects of their decisions on the global economy. Through a blend of analysis and storytelling, Wessel not only explains the intricacies of monetary policy but also questions the implications of such measures for the future of economics, democracy, and international finance. Overall, 'In Fed We Trust' serves as an essential read for anyone seeking to understand the complexities of financial crises and the critical role of central banking in stabilizing economies in distress.

What is the main subject of 'In Fed We Trust'?

A) The history of American banking
B) The Federal Reserve's response to the 2008 financial crisis
C) The creation of the Federal Reserve System
D) Personal finance management

2. Who was the Fed Chairman during the 2008 crisis?

A) Alan Greenspan
B) Janet Yellen
C) Paul Volcker
D) Ben Bernanke

3. Which investment bank collapsed in 2008?

A) Goldman Sachs
B) Morgan Stanley
C) JPMorgan Chase
D) Lehman Brothers

4. What does TARP stand for?

A) Temporary Asset Recovery Plan
B) Troubled Asset Relief Program
C) Treasury Assistance Relief Program
D) Total Asset Recovery Program

5. Who was Treasury Secretary during the crisis?

A) Larry Summers
B) Henry Paulson
C) Timothy Geithner
D) Robert Rubin

6. When was the Federal Reserve created?

A) 1913
B) 1929
C) 1945
D) 1971

7. What was the main cause of the financial crisis?

A) Trade deficits
B) High inflation
C) Subprime mortgage crisis
D) Government overspending

8. Which government agency regulates banks?

A) FDIC
B) SEC
C) FBI
D) IRS

9. What is the discount window?

A) Bank customer service
B) Fed lending to banks
C) Mortgage application process
D) Stock trading platform

10. What does FDIC insure?

A) Stock investments
B) Corporate bonds
C) Real estate
D) Bank deposits

11. What is the federal funds rate?

A) Government bond yield
B) Interest rate banks charge each other
C) Mortgage interest rate
D) Credit card APR

12. Who appoints Fed governors?

A) Congress
B) The Supreme Court
C) The President
D) The Treasury Secretary

13. Which company received the largest bailout?

A) AIG
B) Citigroup
C) Bank of America
D) General Motors

14. What is the FOMC?

A) Financial Operations Monitoring Committee
B) Federal Open Market Committee
C) Financial Oversight Management Council
D) Federal Operations Management Center

15. What was the Dodd-Frank Act?

A) Housing assistance program
B) Bank bailout program
C) Tax cut package
D) Financial reform legislation

16. What is the main theme of 'In Fed We Trust'?

A) Personal finance advice
B) International trade policy
C) History of US currency
D) Unprecedented Fed power during crisis

17. What role did Ben Bernanke's academic background play?

A) He was a military strategist
B) He was a medical doctor
C) He studied the Great Depression
D) He was a lawyer

18. What does the term 'moral hazard' refer to in the context of the book?

A) The risk that rescued institutions will take more risks
B) The hazard of telling lies
C) The risk of political corruption
D) The danger of natural disasters

19. What is the dual mandate of the Fed?

A) Education and healthcare
B) National security and economic growth
C) Maximum employment and stable prices
D) Environmental protection and trade

20. Which institution did the Fed help rescue by facilitating its sale to JPMorgan Chase?

A) Washington Mutual
B) Lehman Brothers
C) Wachovia
D) Bear Stearns

21. How did the Fed respond to the commercial paper market freeze?

A) Created Commercial Paper Funding Facility
B) Closed the stock market
C) Lowered mortgage rates
D) Issued new currency

22. How did the Fed address bank liquidity problems?

A) Importing foreign currency
B) Term Auction Facility
C) Printing more money
D) Closing weak banks

23. How did the Fed's balance sheet change during the crisis?

A) It remained stable
B) It was eliminated
C) It expanded dramatically
D) It shrank significantly

24. What regulatory changes followed the crisis?

A) Gramm-Leach-Bliley Act
B) Dodd-Frank Act
C) Volcker Rule only
D) Sarbanes-Oxley Act

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