History of Spirits Week 7

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Questions and Answers

What is one main function of central banks?

To manage credit card interest rates

To provide direct consumer loans

To regulate advertising for financial institutions

To oversee national currencies and interest rates (correct)

What characterizes a managed floating exchange rate system?

The central bank intervenes occasionally to stabilize the currency (correct)

It is fixed and does not change

It is determined solely by market forces

There are strict controls on capital flows

Which of the following best describes the Euro's introduction?

It replaced the British pound immediately after the Maastricht Treaty

It was launched as a virtual currency in 1999 with physical coins and notes following in 2002 (correct)

It was first introduced in 1995 as a physical currency

It operates independently of other European currencies

Which organization monitors global monetary policies and provides financial support during crises?

International Monetary Fund (IMF) Signup and view all the answers

What is a key feature of a free-floating exchange rate system?

The exchange rate is determined by market supply and demand Signup and view all the answers

In what year was the Bank of Canada established to centralize monetary control?

1935 Signup and view all the answers

What was a significant impact of the Bretton Woods Agreement on currency exchange systems?

It created fixed exchange rates among member countries Signup and view all the answers

What issue did Citibank face in New York that led to attempted service fees?

Legal restrictions from usury laws Signup and view all the answers

Which statement best describes a fixed exchange rate?

It is pegged to another currency, providing stability. Signup and view all the answers

What defines a currency board system?

It is fully backed by foreign reserves at a 100% ratio. Signup and view all the answers

What was a challenge faced by the Euro after its introduction?

Lack of centralized fiscal control among Eurozone members. Signup and view all the answers

What impact did the Marquette case have on consumer finance?

It allowed banks to bypass state usury laws, increasing consumer debt. Signup and view all the answers

Why is the U.S. dollar dominant in global financial markets?

The U.S. military presence secures its value and trust. Signup and view all the answers

What is one of the primary goals of the Euro as a currency?

To create a safer, diversified reserve currency. Signup and view all the answers

What was the primary purpose for creating the Bank of England in 1694?

To raise funds for the Navy. Signup and view all the answers

Which of the following describes fiat money?

Currency that is backed by government declaration. Signup and view all the answers

What are the key roles of the U.S. Federal Reserve established in 1913?

Regulated banks, acted as the lender of last resort, and controlled interest rates. Signup and view all the answers

What significant change occurred with the 1967 Bank Act in Canada?

It allowed banks to enter the mortgage market. Signup and view all the answers

What characterizes a free-floating exchange rate system?

Its value is determined by supply and demand in currency markets. Signup and view all the answers

Which statement is accurate regarding the evolution of money?

Commodity money is representative of intrinsic value. Signup and view all the answers

How did the establishment of the Bank of Canada in 1935 influence banking in Canada?

It provided centralized monetary control. Signup and view all the answers

What is a common misconception about digital money?

It requires physical currency for transactions. Signup and view all the answers

Study Notes

Week 7 - The Politics of Spirits

Gin's history began in the 16th century as "genever," adapted by the British, incorporating juniper berries for flavor and medicinal use.
British policy, under King William III, heavily taxed French brandy but provided tax breaks to British gin producers, making gin cheap and widely abused.
The Gin Act of 1751 resulted from public backlash against gin abuse and implemented regulations.
In the 1800s, gin regained popularity, particularly as gin and tonic (quinine water used as an anti-malarial).
Rum production relied on Caribbean sugarcane plantations, which relied heavily on African slaves to cultivate the crops.
The British gave Jamaican rum as rations to sailors
American colonists switched to whiskey, as British policy discouraged rum.
Castro seized Bacardi distilleries after the Cuban Revolution; the Bacardi family then relocated and expanded globally, establishing operations in Puerto Rico.

Week 7 - Prohibition Era

Prohibition criminalized the manufacture, sale, and possession of alcohol.
Canada's interest in prohibition was influenced by British and American examples through organizations like the Dominion Alliance.
Provinces began implementing prohibition in 1901, but PEI maintained it until 1948.
During WWI, prohibition was viewed as patriotic, contributing to food conservation efforts.
Canadian soldiers were given rum rations for morale and medicinal purposes.
The 1898 Canadian Referendum majority supported prohibition, except in Quebec, which opposed Prohibition by an 80% margin.
The rise of black markets led to increased crime after WWI.
Brewers and distilleries suffered business losses and job losses.
Ontario switched from prohibition to government control of alcohol sales, initiating the LCBO in 1927.
Strict regulations were introduced, including stricter vetting of buyers and restrictions on alcohol advertising, promoting temperance and sobriety.

Week 8 - Roman Holiday and Pilgrimages

Roman Empire's stability and resources enabled early tourism.
Wealthy Romans toured locations like Southern Italy, Greece, Troy, and Egypt, including Nile cruises, enjoying visits to spas and baths.
Pilgrimages were spiritual journeys and sightseeing opportunities in Christianity, Buddhism, and Islam.
Businesses emerged to organize pilgrimages, providing food, drink, and lodging.
The Grand Tour was a 2-3 year journey undertaken by wealthy young gentlemen across Europe, focusing on classical architecture, art, and history in locations like England, France, Italy, and Greece.
Banks provided letters of credit to travelers.

Week 8 - Thomas Cook Travel Company

Thomas Cook founded and expanded his tour company in 1899.
The company was sold in 1928 to a Belgian firm.
British railways took over during WWII and was nationalized postwar.
Privatized in the 1970s and declared bankruptcy in 2019.
Jet planes and deregulation of the airline industry opened up travel in the 1970s.
Travel expanded after the end of the Cold War.
Travel and tourism accounted for 10.5% of global jobs (334 million) and 10.4% of global GDP in 2019 (pre-pandemic).
International visitor spending reached $1.91 trillion in 2019.

Week 9 - Types of Money

Commodity money uses objects like gold, silver, or grain with intrinsic value.
Token money are coins or paper money tied to a commodity's value.
Fiat money is backed by government declaration not a commodity.
Digital money is exchanged electronically, such as cryptocurrencies.
Historical developments of money include the transition from metallic coins into representative tokens.

Week 9 - Banking Evolution

The Bank of England was established in 1694 to raise funds for the Navy.
The bank issued currency as part of its operations
The US Federal reserve was established in 1913 in response to the 1907 crisis to stabilize the currency

Week 10 - Evolution of the Textile Industry

Textiles date back to prehistoric times
Early hubs for textile production include China, Turkey, and India along the Silk Road.
Egyptian Pharaohs utilized linen and animal skins; the Byzantine Empire prized purple silk produced from silkworms.
The Silk Road connected China to Rome, driving demand for silk as a luxury commodity.
Silk production was a Chinese state secret until ~300 AD
The spread of silk facilitated cultural and economic exchanges.
The Industrial Revolution shifted textile production from homes to factories.
Key inventions such as the Spinning Jenny (1764), Water Frame (Richard Arkwright's invention, 1785), and Power Loom (1785) sped up thread production and faster weaving using steam power.

Week 11 - Petroleum

Petroleum is a naturally occurring liquid found beneath the Earth's surface.
It is formed from the decomposition of organic matter under high pressure and heat over millions of years.
Key uses of petroleum include fuel for vehicles, heating units, and machines, with products including plastics, fertilizers, kerosene, and gasoline.
Petroleum contains hydrocarbons with varying molecular weights.

Week 11 - Energy Sector and Gasoline

Petroleum is divided into upstream (extraction), midstream (transport and storage), and downstream (processing and selling) sectors.
Petroleum is a valuable energy source due to high energy efficiency and ease of transport.
Petroleum is a non-renewable resource and damaging to the environment due to carbon emissions and extraction/transportation methods.
Gasoline is a byproduct of kerosene refining, becoming essential for cars, tractors, and planes after the invention of the internal combustion engine.

Week 11 - OPEC and Oil Market

OPEC, or the Organization of the Petroleum Exporting Countries, was founded in 1960 to coordinate petroleum policies among member countries.
OPEC manages oil production quotas to influence global oil prices.
Significant influence due to controlling 72% of global oil reserves.
The 1973 oil embargo caused an economic recession in the West.
Benchmarks like Brent Crude (from North Sea oil) and West Texas Intermediate (WTI) in Oklahoma are used to track global oil prices.

Week 11 - Impacts, Oil Industry, Reserves

Oil supply disruptions cause varying global impacts as a result of price volatility.
Major historical events tied to oil include the 1973 Arab Oil Embargo, the Iranian Revolution, and the Iran-Iraq War.
The 1990 Gulf War, and the 1953 Iranian Coup were all oil-related conflicts.
Oil is a valuable strategic resource for warfare.
Canada's oil industry is predominantly in Southwestern Ontario and Alberta's oil sands.
Major companies (like Imperial Oil and Petro-Canada) hold key roles in the Canadian oil industry with Petro-Canada previously being a government-owned corporation.
Top oil-producing countries, as of 2022 include Venezuela, Saudi Arabia, and Canada.

Week 12 - The Service Economy

The service economy encompasses activities like transportation, healthcare, education, finance, tourism, and consulting.
Key characteristics are intangibility, inseparability, lack of inventory, inconsistency, and involvement.
The service economy accounts for 63.6% of the global economy.
Deindustrialization, or a decline in manufacturing and industrial sectors, led to a rise in services due to technological advancements and economies of scale.
The US contributes 30% of global service sector output.

Week 12 - Supply Chain Resilience

Supply chain disruptions are an important factor in the service economy.
The ADDAPT Framework helps adapt to interruptions by anticipating, detecting, diagnosing, activating, protecting, and tracking potential issues.

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Description

Explore the intriguing history and politics surrounding spirits like gin and rum. This quiz covers significant events like the Gin Act of 1751 and the impact of colonial policies on spirit production, providing insights into the cultural ramifications. Test your knowledge on how these beverages influenced societies over the centuries.