Who Looks After Money: teacher key

Money, grade 11 edition, written for 11th grade. Central banks, gold, inflation and counterfeiters all shape money. Learn how the Federal Reserve and the Bank of England work, and what keeps a currency trusted.

Read the book. Print this page for the key.

Questions and answers

1. What did coin stamping let people do?
   • Give the metal new value
   • Trust the stamp instead of re-weighing and re-testing the lump each trade (answer)
   • Print paper money
2. What ended the Bretton Woods system?
   • The euro was launched
   • The Fed began issuing notes
   • The U.S. ended the dollar's convertibility to gold in August 1971 (answer)
3. What does the Federal Reserve do with bills it receives?
   • It checks them with machines; good ones circulate again and the rest are destroyed (answer)
   • It prints them
   • It melts them into coins
4. Why does core inflation leave out food and energy?
   • They are never counted
   • Their prices can go up and down a lot, so leaving them out shows the trend more clearly (answer)
   • They are always rising
5. Which statement fits the evidence on cash?
   • Cash use doubled from 2016 to 2025
   • Cash is no longer legal
   • Cash was about one-third of U.S. payments in 2016 and 14 percent by 2025 (answer)
6. Why do people use fiat money?
   • They trust governments and central banks will not wreck its purchasing power (answer)
   • It is backed by metal
   • It is heavy

Words

• monopoly: sole control
• numismatic: about coins
• convertibility: ability to swap
• inflation: rising prices
• fiat: unbacked money