The History of Money in 10 Minutes

What was used as an early form of money before it was invented?

• Gold coins

• Whale's teeth

• Paper notes

• Barley

Why did people start using objects like whale's teeth as money?

• Because they were easy to find

• To trade with anyone freely

• To enforce IOU notes

• As a durable form of currency

What characteristic of money was highlighted by the use of barley?

• Portability

• Divisibility

• Scarcity

• Durability

What problem did sovereigns create with metal money?

• Making it too heavy

• Linking it directly to gold

• Circulating debased currency

• Limiting its use to local communities

What was the main reason paper money was introduced by early Chinese rulers?

• To make transactions faster

• To prevent theft of coins

• To facilitate long distance trade

• To introduce a new form of art

What led to the American War of Independence according to Benjamin Franklin?

• The use of race stones

• The burden of British taxation

• The introduction of paper money

• The invention of banking

What is fractional reserve banking?

• Charging high interest rates on loans

• Printing more paper money than there is gold

• Storing large reserves of gold

• Lending out more money than the bank holds

What was a major financial event in 2007?

• The creation of the American dollar

• The end of the gold standard

• A run on the bank

• The introduction of digital currency

Why does the dollar retain its value?

• Because it is backed by gold

• Due to the trust and faith people have in it

• Because it is the only currency used internationally

• Due to its limited supply

What will signify that a new form of money has become important?

• When it is used in 2% of transactions

• When governments and banks try to control it

• When it is accepted for taxes by a government

• When it is backed by gold