This quiz consists of 5 multiple choice and 5 short answer questions through Section IV. A Tale of Three Banks, Chapters 16-19 The Creature Comes to America; A Den of Vipers; Loaves and Fishes, and Civil War; Greenbacks and Other Crimes.

Multiple Choice Questions

1. What occurred when coinage was weakened through lower percentages of precious metal or completing stripped of such backing?
(a) Inflation and political turmoil occurred when the coinage was debased through lower percentages of precious metal or none at all.
(b) Paper money was seen to be the superior monetary system when the coinage was debased through lower percentages of precious metal or none at all.
(c) Stock market instability occurred when the coinage was debased through lower percentages of precious metal or none at all.
(d) Deflation resulted when the coinage was debased through lower percentages of precious metal or none at all.

2. What happened when a debtor defaulted on a loan?
(a) When a debtor defaulted on a loan, he would stop making payments.
(b) When a debtor defaulted on a loan, he would ask loan payments be waived.
(c) When a debtor defaulted on a loan, he would ask the government for a guaranteed loan.
(d) When a debtor defaulted on a loan, he would first ask for more time to pay.

3. What drove prices upward during the War of 1812?
(a) During the War of 1812, the Federal Reserve created bank notes that the government used to purchase war materials, tripling the money supply and driving prices upwards.
(b) During the War of 1812, the US Congress created bank notes that the government used to purchase war materials, tripling the money supply and driving prices upwards.
(c) During the War of 1812, wildcat banks created bank notes that the government used to purchase war materials, tripling the money supply and driving prices upwards.
(d) During the War of 1812, the central bank created bank notes that the government used to purchase war materials, tripling the money supply and driving prices upwards.

4. What happens when the Federal Reserve System prints new money?
(a) When the Federal Reserve System creates new money, it improves the overall economy.
(b) When the Federal Reserve System creates new money, it increases the value of the money already in the system.
(c) When the Federal Reserve System creates new money, it causes the stock market to rally.
(d) When the Federal Reserve System creates new money, it dilutes the value of the money already in the system.

5. What important aspect about the economic history of the country did the author fail to mention?
(a) The author failed to mention that our economic system is impossible to fix.
(b) The author failed to mention that our economic system depends on foreign investments.
(c) The author failed to mention that our economic system may have been fixed at one time and then broken again.
(d) The author failed to mention that our economic system depends on the success of the stock market.