The Value of Money Review

Read this passage from "The Value of Money."

But certain products can and do deflate without affecting a country’s economy. The technology industry is a good example. Prices for computers, televisions, and phones decrease over time. This does not happen because the demand for those goods is low. It happens because the parts become cheaper and cheaper to make. Therefore the product itself becomes cheaper and cheaper to make.

Which answer choice best describes the relationship between the events described in the passage?

• They are connected by problem and solution.

• They are compared and contrasted.

• They are connected by cause and effect.

• They are described in chronological order.

Look at the chart entitled "German Marks per U.S. Dollar 1922 to 1923" on page 37 of "The Value of Money."

Based on this chart, during which period did the value of the German mark decrease most rapidly?

• in the second half of 1923

• in the second half of 1922

• in the first half of 1923

• in the first half of 1922

According to "The Value of Money," why is it correct to state that wages have kept up with inflation when it comes to stamp prices between 1952 and 2018?

• The cost of stamps rose dramatically between 1952 and 2018, while wages remained stable during that period and did not rise.

• The cost of stamps went down between 1952 and 2018, while the amount of money people earned went up during that period.

• Wages in 2018 were equal to the cost of stamps in 2018, and the same was true for wages and stamps in 1952.

• Wages in 2018 were 19 times higher than they were in 1952, while the cost of stamps in 2018 was only 17 times higher than in 1952.

Which answer choice best describes the way in which "The Value of Money" is structured?

• It is organized in ways that connect events by cause and effect.

• It is organized in chronological order.

• It is organized to describe ideas spatially.

• It is organized in ways that allow the author to compare and contrast ideas.

Refer to "The Value of Money" and "From Barter to Bitcoin" to answer the question.

How is the structure of "The Value of Money" different from the structure of "From Barter to Bitcoin"?

• "The Value of Money" describes the most important ideas and events first, while "From Barter to Bitcoin" makes comparisons between ideas and events.

• "From Barter to Bitcoin" describes problems and their solutions, while "The Value of Money" compares and contrasts various ideas and events.

• "The Value of Money" addresses several problems caused by money and then describes a solution to each one, while "From Barter to Bitcoin" describes how various forms of money are alike and different.

• "From Barter to Bitcoin" traces the history of money in chronological order, while "The Value of Money" describes the cause-and-effect relationships that determine what money is worth.

Think about what you’ve read and interpret the information to answer the question.

Why do governments seek to prevent counterfeiting?

• Counterfeiting causes cryptocurrencies to lose their value, which can prevent wages from keeping up with inflation.

• Counterfeiting stops governments from printing money, which causes supply shock and rapidly rising prices.

• Counterfeiting causes higher unemployment among those who design and create paper money, and it leads to deflation.

• Counterfeiting allows people to buy goods with fake money, and a major counterfeiting operation could cause inflation.

Why do governments take old and damaged paper money out of circulation when printing more, rather than just printing more?

• Allowing the old money to stay in circulation would lead people to believe that counterfeiting was now legal.

• Simply printing more money without removing the old money would cause deflation and supply shock to occur.

• Allowing the old money to stay in circulation and printing more would increase the money supply and could lead to inflation.

• Simply printing more money without removing the old money would result in that new money getting damaged more quickly.

Based on your readings so far in this unit, which statement is true?

• Supply shock would not have been a problem for a society that used only coins as money and had not paper currency.

• When deflation occurs, governments relax their rules on which coins can leave the mints where they are made and enter circulation.

• Money has changed a lot over time, but problems related to money, such as counterfeiting, inflation, and deflation, remain.

• Native Americans use wampum as currency because it was impossible to counterfeit and therefore prevented inflation.