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This test consists of 5 multiple choice questions, 5 short answer questions, and 10 short essay questions.

Multiple Choice Questions

1. During the history of the world, what types of things were first traded?
(a) During the history of money development, trade started out between neighboring communities.
(b) During the history of money development, trade started out with bartering commodities, cows traded for grain and so on.
(c) During the history of money development, the first currency system was based on grain and livestock.
(d) During the history of money development, trade started out with a rudimentary currency system.

2. What impact does deflation have on individuals who are repaying loans?
(a) Deflation causes people to repay more value on loans taken out during a bull market.
(b) Deflation causes people to repay more value on loans taken out during inflationary times.
(c) Deflation causes people to repay more value on loans taken out during a bear market.
(d) Deflation causes people to repay more value on loans during an economic downturn.

3. What new way of home ownership emerged in the 1980s?
(a) Housing co-ops became another way to buy a home.
(b) A government sponsored home buyer's savings program was established.
(c) Condominiums became a new way to buy a home.
(d) The government incentivized buyers to buy foreclosed upon homes.

4. How did the development of paper money begin?
(a) The development of paper money started out as vouchers issued by the government.
(b) The development of paper money started out as simply receipts issued by goldsmiths who were the first banks.
(c) The development of paper money started out as simply receipts issued by goldsmiths who gave the people's gold coins to the government.
(d) The development of paper money started out as simply receipts issued by goldsmiths who kept other people's gold coins in their vaults.

5. Who was the mastermind behind the Federal Reserve?
(a) Thomas Jefferson was the mastermind behind the Federal Reserve.
(b) Henry Kissinger was the mastermind behind the Federal Reserve.
(c) Paul Moritz Warburg was the mastermind behind the Federal Reserve.
(d) Alexander Hamilton was the mastermind behind the Federal Reserve.

Short Answer Questions

1. What countries did the author point to as failures of the IMF and World Bank?

2. What generalization did the author make about conspiracy theorists?

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

4. The Federal Reserve System was designed to control what element of member banks?

5. Since its inception in 1910, the Federal Reserve had made what decisions about bank bailouts?

Short Essay Questions

1. According to Chapter 4, what presidential action may have contributed to the economic woes?

2. According to Chapter 1, where did the idea for the Federal Reserve System originate?

3. In Chapter 8, how did the development of paper money begin?

4. According to Chapter 7, how did modern monetary systems originate historically?

5. In Chapter 7, what impact did the Greek currency system have on the economy?

6. According to Chapter 7, What can result when paper money is not backed with gold or silver?

7. According to Chapter 1, what was the main purpose of the Federal Reserve System?

8. In Chapter 4, how was the employment picture beginning to change?

9. According to Chapter 4, when did Americans become interested in socialism?

10. According to Chapter 5, what country contributed the largest investment in the IMF?

(see the answer keys)

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