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the PoSitive Money quiz Written and developed by David Faraday

Goldsmiths, or early bankers, started issuing promissory notes for the gold or silver they stored as early as 1633. But how many decades passed before these actually become recognised as legal tender?
7 Years
7 Decades
Like the chicken and the egg, which came first banking or money?
Money
Banking
In which year were independent or commercial banks legally stopped from printing their own bank notes?
1814
1844
1874
1904
The population of the UK is around 64m, approximately how much cash (bank notes and coins created by the Bank of England) is currently in circulation in the UK economy?
£670m
£6.7bn
£67bn
£670bn
When bank notes and coins are manufactured the government, via the Bank of England, essentially sells them to commercial banks at face value. This income, after manufacturing and distribution costs, is called:
Seiniorage
Dividend
Tobin Tax
Interest
In our digital age, of course, we don’t always use cash. Often we use electronic money, through debit and credit cards or through standing orders and direct debits from our bank accounts. So what proportion of the total money in our economy do bank notes and coins actually make-up?
3%
37%
63%
97%
It took 300 years to create the first trillion pounds, how long did it take to create the second trillion?
8 months
8 years
80 years
160 years
Who created most of this money?
The Government
Working People
The Commercial Banks
The Bank of England
The electronic money that the Bank of England creates is known as Central Bank Reserves; it’s this money that commercial banks exchange between themselves to settle their accounts. Since the financial crisis the Bank of England has created more Central Bank Reserves through a process known as Quantitative Easing, but how much have they created?
£3.75bn
£37.5bn
£375bn
£3.75tn
For every pound created through Quantitative Easing, how much does Positive Money estimate has actually reached the ‘real’ economy?
68p
32p
8p
5p
If the money generated through Quantitative Easing was spent directly into the ‘real’ economy, for every pound spent how much does Positive Money estimate the economy would grow by?
28p
£1.80
£2.80
£11.80
What proportion of the adult population in the UK believes that banks simply ‘hold on to any money deposited with them’, like a commercial ‘piggy bank’?
One tenth
One fifth
One quarter
One third
When you deposit some of your own money into a bank account, maybe your saving for holiday or simply keeping your money safe, who then legally owns that money?
You
The Bank
What term do bankers use to describe any deposits you might have with them?
Assets
Debts
Liabilities
Credits
Most of the remaining members of the public believe that banks actually loan out any money that’s deposited with them to other people or businesses. What term do bankers use to describe the loans that they make?
Assets
Debts
Liabilities
Credits
Economics students, and most other financially trained people, understand things slightly differently. They have been taught the money multiplier, or fractional reserve, model of banking. However, even though this model is still widely taught, it’s not quite how the system works. Professor Charles Goodhart of the LSE, an adviser to the BoE, described this model as “such an incomplete way of describing the process of the determination of the stock of money that it amount to mis-instruction”. When do you think he said this?
2014
2004
1994
1984
To make a loan of £100,000, legally how much money does a bank need to have on deposit or keep in reserve?
£100,000
£50,000
£10,000
Nothing
When you take out a loan the bank simply creates a balance sheet, on one side they put the amount you’ve borrowed, which you see as your loan account or your repayment schedule, and on the other side they put the amount they’ve given to you, which you see as money in your deposit account. What is this process called?
Magic
Double entry accounting
Fraud
Good practice
You borrow £100 from a bank, but you’re not sure it’s real money because you now know a little about where it’s come from, what’s the simplest method of testing out whether it’s real or not?
Borrow it down the Pub
Withdraw it from a cash machine
How do the banks make any money through this process?
Bank Charges
Charging Interest
When was the legislation passed that gave the commercial banks the power to create money through issuing debt in the form of loans?
1066
1666
1776
There has never been any law passed
When the loan is repaid, what happens to the money?
It is Re-Loaned
The Government Takes it back
It Is Destroyed
It Goes to the Tooth fairy
Over the ten years prior to the financial crisis by how much did mortgage lending increase?
Two times
Three times
Four times
Five times
In 1996, on average a first time buyer would spend 17.5% of their take home salary on their mortgage. What percentage of a first time buyer’s take home salary was required by 2008?
9.3%
29.3%
49.3%
69.3%
On average, the richest 10% of the population pay 1.4% of their income to the banks in interest. How much do the poorest 10% pay?
1.4%
6.4%
9.4%
18.4%
In a recent Positive Money poll of 100 MPs, what percentage said that the following statement was true: “Only the government – via the Bank of England or Royal Mint – has the authority to create money, including coins, notes and the electronic money in your bank account.”?
91%
71%
51%
31%
Between 2003 and 2008, 646 MPs elected by more than 24m voters, oversaw government spending of £2.1tn. Over the same period the five largest UK banks created £2.9tn through issuing debt. The key decisions about how much debt to issue are taken by the board members of these banks. How many of them were there?
780
156
78
16
Excluding property, what proportion of the money that banks created do you think Positive Money have estimated actually went into businesses outside the financial sector, what commentators often refer to as the ‘real’ economy?
64%
32%
16%
8%
In 2013, who said: “The financial crisis of 2007 to 2008 occurred because we failed to constrain the financial system’s creation of private credit and money.”
Gordon Brown (former PM and Chancellor);
Lord Adair Turner (former Chair of the Financial Services Authority);
George Osbourne (the last but one Chancellor);
Mark Carney (the current Governor of the Bank of England)
Is it possible to take the power to create money away from the commercial banks?
Yes
No
Who do think that Positive Money recommends to be given the power to create money?
The Prime Minister
Parliament
An independent committee
Russell Brand, campaigning comedian
Is it possible to create the necessary legislation to have debt-free money?
Yes
No
The UK population pay £192m in interest everyday to the banks, how much have we had to pay since the start of this quiz?
£12m
£2m
£4m
£8m
0
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