Remember: A gold standard promises gold for money, and it only works while the promise is kept: one note for each bar, and never one more.
Read and answer
Read the story first, then answer.
The vault in GoldmereIn the made-up village of Goldmere, a man called Tomas guarded the village gold: ten shiny bars in a vault. Goldmere's coins were once real gold, but gold is heavy, and a full bag made Rina's back ache. Tomas had an idea: keep the gold safe and hand out paper notes. Each note was a promise worth one bar of gold, with a seal pressed on so everyone knew it was real. When Rina handed Tomas a note, out came a gold bar, so people trusted the notes. Tomas had one strict rule: print only as many notes as there are bars. Ten bars meant ten notes, and never one more. One spring the village wanted a new bridge. "Print two more notes," said the mayor, "for nobody will ask for all their gold at once." Now there were twelve notes but still ten bars. Then a rainy summer rotted the crops, and a rumour spread that the vault held less gold than there were notes. Everyone rushed to swap their notes for gold. After ten swaps the vault was bare, and two people held notes that could not be swapped. Goldmere's promise was broken.
1
Goldmere has 10 bars of gold, and Tomas's rule is one note for each bar. He prints notes.
2
Why did Rina like paper notes better than gold coins?
Paper is heavier, so it is saferA note is light and can be swapped for a gold barGold had stopped existing
3
A seal on every note showed that the note was real.
TrueFalse
4
There are 12 notes but only 10 bars. notes have no bar behind them.
5
Why was Goldmere's promise broken?
Tomas locked the vault doorRina lost her noteThe vault was bare, so two notes could not be swapped
Order, match and think
6
Number what happened in Goldmere.
Rina carries heavy gold coins
Tomas hands out notes with seals
The vault runs out of gold
Two extra notes are printed
7
Join each word to what it means in the story.
1vault
2note
3seal
4rush
Awhere the gold is kept safe
Bshows a note is real
Ca promise worth one bar of gold
Deveryone swaps notes for gold at once
8
In the 1800s, many real countries tied their money to gold.
TrueFalse
9
Rina says: printing extra notes costs the village nothing, so it is safe. Is Rina right?
YesNo
10
Which is true today?
Money works because people trust it and rules say how much is madeEvery note can be swapped for goldGold coins pay for bread
11
Some say the gold standard kept prices steady. What else did it do?
It let villages print as many notes as they likedIt limited how much money existedIt made notes heavier
12
Write Tomas's rule about notes and bars in your own words.
13
Draw the vault with ten bars. Then draw it after the rush.
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