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Lesson 7
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ARCO
■ SAT II Subject Tests
66. The correct answer is (B). In the late nineteenth century, in order to protect its “lifeline” to the Far
East, Great Britain acquired a controlling interest in the Suez Canal. In 1956, Egyptian leader Gamal
Abdel Nasser announced that Egypt would nationalize the canal. This prompted the intervention of
French and British troops. Militarily, the operation was successful, but the French and British had
miscalculated American reaction. The United States and the Soviet Union, cooperating at the United
Nations, forced the British and French to accept a cease fire. The Suez crisis is important because it
represents the end of a chapter in the history of British imperialism.
67. The correct answer is (E). Inflation is a rise in prices that is not the result of some increase in the
value of goods purchased. Inflation is said to erode the purchasing power of money. Assume, for
example, that a loaf of bread cost $1.00 last year. If a similar loaf of bread costs $1.10 this year, then
there has been a 10 percent increase in the price of bread that is not the result of some improvement in
the quality of the bread. This is inflation. Most industrialized countries experience some inflation, but
the rate of price increases is not intolerable. When prices rise tremendously in a short period of time,
as described above, the result is runaway inflation. Runaway inflation has disastrous consequences
because wages don’t keep pace with prices. People with relatively fixed incomes, for example, pen-
sions, rental income from long-term leases, and government employees, are particularly hurt. The
social upheaval that followed the runaway inflation after World War I in Germany was one factor in
the rise to power of the Nazis.
68. The correct answer is (B). In 1803, Napoleon amassed a large army on the French coast as a prelude to
an invasion of England. For two years, the expeditionary force waited for the French navy to establish
control over the English Channel. On October 21, 1805, a British squadron under the command of Admiral
Horatio Nelson decisively defeated the French navy in the Battle of Trafalgar. Unable to execute the
planned invasion of England, Napoleon concentrated on acquiring territory on the Continent.