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This quiz consists of 5 multiple choice and 5 short answer questions through Section III. The New Alchemy, Chapters 13-15 Masquerade in Moscow; The Best Enemy Money Can Buy; The Lost Treasure Map.

Multiple Choice Questions

1. What resulted when paper money was not backed with gold or silver?
(a) Money not backed by precious metal led to inflation and political upheaval.
(b) Money not backed by precious metal led to higher deficits.
(c) Money not backed by precious metal led to booming economies and political stability.
(d) Money not backed by precious metal led to deflation and political upheaval.

2. Why was gold considered the ideal metal behind a monetary system?
(a) Gold was considered the perfect metal because of its value and availability.
(b) Gold was considered the perfect metal because it was the most common of the precious metals.
(c) Gold was considered the perfect metal because it was the most sought after of the precious metals.
(d) Gold was considered the perfect metal because of its intrinsic value and scarcity throughout history.

3. What was one of the strongest arguments in favor of bank regulation versus nationalization?
(a) An argument in favor of regulation was that it would purge the system of fraud and abuse.
(b) An argument in favor of regulation was that, when properly administered, it had worked from the time of Franklin D. Roosevelt (President of the US from 1933 to 1945) to 1970.
(c) An argument in favor of regulation was that it would cause less unemployment.
(d) An argument in favor of regulation was that the American people felt uncomfortable with nationalization.

4. What importance does political ideology have on the nationalization of banks?
(a) The Congressional chairman of the Banking Committee influences support for nationalization.
(b) Political lobbyists for banks have great influence on their nationalization.
(c) Liberal ideologues have the great influence on bank legislation.
(d) The nationalization of banks is such a strong part of the overall economy that political ideology did not matter.

5. What problems did the economy of the American Colonies incur?
(a) The American Colonies experienced terrible bouts of inflation.
(b) The American Colonies experienced terrible bouts of deflation.
(c) The American Colonies experienced economic uncertainty due to interference by England.
(d) The American Colonies experienced instability in their economy.

Short Answer Questions

1. What did the USSR implement instead of true Communism?

2. What resulted after the first electronic run on banks in 1983?

3. How did the Federal Reserve System accomplish the nationalization of banks?

4. How did the development of paper money begin?

5. In what year was First Pennsylvania Bank bailed out?

(see the answer key)

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