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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 events cause deflation?
(a) Deflation occurs when prices suddenly increase.
(b) Deflation occurs when the government takes steps against inflationary signals.
(c) Deflation occurs when prices suddenly tumble.
(d) Deflation occurs when the stock market suddenly tumble.

2. What were the results of the Russian revolutions?
(a) The first revolution brought in a a somewhat democratic government, while the second brought in a a somewhat democratic government.
(b) The first revolution brought in a somewhat democratic government, while the second brought in a a somewhat democratic government.
(c) The first revolution brought in a monarchy, while the second brought in a tyrannical government.
(d) The first revolution brought in a somewhat democratic government, while the second brought in an oligarchy.

3. How did the Federal Reserve System accomplish the nationalization of banks?
(a) The politics of the Federal Reserve System became new and inventive ways to justify the nationalization of banks through the use of bailouts.
(b) The politics of the Federal Reserve System became new and inventive ways to justify the nationalization of banks through the use of short-term loans.
(c) The politics of the Federal Reserve System became new and inventive ways to justify the nationalization of banks through the use of new legislation.
(d) The politics of the Federal Reserve System became new and inventive ways to justify the nationalization of banks through the use of risky loans.

4. What resulted from the 1970 Penn Central Railroad bailout?
(a) Travel in the US decreased as a result of the bailout.
(b) Air traffic increased after the bailout.
(c) More roads were built by the government as a result of the bailout.
(d) The 1970 Penn Central Railroad bailout resulted in government-owned Amtrak and privately owned Conrail.

5. What did the issuance of the first paper money lead to?
(a) The lending process evolved from the establishment of the paper money system.
(b) Stronger economies evolved from the establishment of the paper money system.
(c) Banks evolved from the establishment of the paper money system.
(d) The class system evolved from the establishment of the paper money system.

Short Answer Questions

1. What monetary system did the Constitution of the newly formed United States require?

2. What historic reference is contained in this chapter?

3. What was a fundamental flaw in a paper money system not backed by gold?

4. What resulted when paper money was not backed with gold or silver?

5. What city became a major part of the welfare state in 1975?

(see the answer key)

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