A History of Money

History · 10 questions

From barter to banknotes: how value learned to travel.

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1. Where are the first known coins thought to have been struck?

   1. Egypt
   2. Rome
   3. China
   4. Lydia
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   D) Lydia

2. Where did paper money first come into wide use?

   1. India
   2. China
   3. Italy
   4. Egypt
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   B) China

3. What does it mean for a currency to be 'fiat'?

   1. It can be exchanged for gold
   2. It can be printed without limit
   3. Its value rests on state backing
   4. It exists only digitally
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   C) Its value rests on state backing

4. What was the main consequence of abandoning the gold standard?

   1. Money supply was no longer tied to gold
   2. Gold became completely worthless
   3. Banknotes went out of use
   4. Interest rates were fixed
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   A) Money supply was no longer tied to gold

5. Why do people spend money quickly during hyperinflation?

   1. The banks have all closed
   2. The law requires them to
   3. Prices are being held fixed
   4. Waiting erodes its purchasing power
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   D) Waiting erodes its purchasing power

6. What does it mean that banks operate on 'fractional reserve'?

   1. Only part of deposits is kept on hand
   2. Profits are shared with depositors
   3. They borrow constantly from the state
   4. They store gold in a vault
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   A) Only part of deposits is kept on hand

7. Which principle states that bad money drives out good?

   1. Say's Law
   2. Okun's Law
   3. Gresham's Law
   4. Engel's Law
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   C) Gresham's Law

8. The idea that barter was a common stage before money is disputed by anthropologists.

   1. True
   2. False
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   A) True

9. Coins have at times been deliberately debased by reducing their precious metal content.

   1. True
   2. False
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   A) True

10. The number printed on a banknote equals the value of the paper itself.

    1. True
    2. False
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    B) False