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This quiz consists of 5 multiple choice and 5 short answer questions through Section II. A Crash Course on Money, Chapters 9-10 The Secret Science; The Mandrake Mechanism.

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 deflation and political upheaval.
(b) Money not backed by precious metal led to higher deficits.
(c) Money not backed by precious metal led to inflation and political upheaval.
(d) Money not backed by precious metal led to booming economies and political stability.

2. What is the true function of the FDIC?
(a) The FDIC is another way to demonstrate the strength of the economy.
(b) The FDIC is another way to pay off the debt of the taxpayer.
(c) The FDIC is another way to pay off banking mistakes through the taxpayer.
(d) The FDIC is another way to support the people who use banks.

3. Why did banks offer debtors more credit?
(a) Banks offered more credit to debtors to so they could increase their purchasing power.
(b) Banks offered more credit to debtors to increase interest payments to the them.
(c) Banks offered more credit to debtors to help improve their credit rating.
(d) Banks offered more credit to debtors to help them purchase homes.

4. What debt would be incurred by future generations from currency devaluation?
(a) National debts were paid right away from the currency devaluation and only national growth expenses would be inherited by future generations.
(b) National debts were paid right away from the currency devaluation and only debts to foreign investors would be inherited by future generations.
(c) National debts were paid right away from the currency devaluation and only deficits would be inherited by future generations.
(d) National debts were paid right away from the currency devaluation and only interest payments would be inherited by future generations.

5. What resulted after the first electronic run on banks in 1983?
(a) The first electronic run on banks happened in 1983, leading to a hoarding of cash.
(b) The first electronic run on banks happened in 1983, leading to a massive bailout in the $6 billion range.
(c) The first electronic run on banks happened in 1983, leading to one trillion dollars being added to the deficit.
(d) The first electronic run on banks happened in 1983, leading to a collapse of the economy.

Short Answer Questions

1. How did many people feel about those who went too far into debt?

2. What occurred when coinage was weakened through lower percentages of precious metal or completing stripped of such backing?

3. What did the issuance of the first paper money lead to?

4. What culture first developed the modern equivalent of the banking industry?

5. What is the fundamental basis of capitalism?

(see the answer key)

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