Too Much Money - Understanding Inflation Quiz

What is inflation?

• A. Decrease in prices of goods and services

• D. Increase in wages

• B. Increase in prices of goods and services

• C. Fluctuation in stock market

What is the main cause of inflation according to Lawrence Reed?

• D. Rise in taxes

• C. Natural fluctuations in the marketplace

• B. Printing too much money by the government

• A. Increase in demand for goods and services

What historical event led to hyperinflation in Germany in the 1920s?

• D. World War II

• C. Spanish conquest of Inca gold

• B. American Revolution

• A. World War I

What was the impact of hyperinflation in Bolivia in the 1980s on the economy and people?

• B. Prosperity for the rich

• A. Increase in the value of Bolivian pesos

• C. Devastation of the middle class

• D. Decrease in the use of paper money

What was the value of one million Bolivian pesos in 1978?

• D. 40 U.S. dollars

• A. 40,000 U.S. dollars

• B. 4,000 U.S. dollars

• C. 400 U.S. dollars

What did the German government do to pay off the huge bill presented by the Allies after World War I?

• A. Increased taxes on its citizens

• B. Printed more money

• C. Borrowed from another country

• D. Implemented strict economic policies

What did the American Continental Congress do in 1777 to combat the lack of money for the war?

• C. Borrowed from another country

• B. Printed more money

• A. Increased taxes on its citizens

• D. Implemented strict economic policies

What was the impact of hyperinflation in Bolivia in the 1980s on the use of paper money?

• B. It was used as decoration

• C. It was replaced by electronic goods as currency

• D. It became worthless

• A. It became more valuable

What did the Inca kings use gold for?

• B. Decoration

• D. War

• C. Ceremonial painting

• A. Money

What did the Spanish conquistadors do with the Inca gold?

• B. Used it as money

• C. Returned it to the Incas

• D. Melted it down for other uses

• A. Used it for decoration