This quiz works best with JavaScript enabled. Home > Cbse > Class 12 > Commerce > Economics Macro Economics > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 12 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 12 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following services provided by banks involves transferring money electronically between accounts? A) Electronic funds transfer. B) Bank loans. C) Financial advice. D) Pension services. Show Answer Correct Answer: A) Electronic funds transfer. 2. What is inflation? A) Inflation is the increase in prices and fall in the purchasing value of money. B) Inflation is the process of reducing the money supply to stabilize prices. C) Inflation refers to the total amount of money in circulation without any price changes. D) Inflation is the decrease in prices and increase in the purchasing value of money. Show Answer Correct Answer: A) Inflation is the increase in prices and fall in the purchasing value of money. 3. Money is something that is A) Accepted by banks. B) Locally accepted. C) Regionally accepted. D) Universally accepted. Show Answer Correct Answer: D) Universally accepted. 4. This practice of retaining only a portion of deposits on hand and lending out the rest is called A) A bank run. B) Fractional reserve banking. C) Demand deposits. D) Bartering. Show Answer Correct Answer: B) Fractional reserve banking. 5. Which of the following is a secondary function of money? A) Measure of Value. B) Medium of Exchange. C) Standard of Deferred Payments. D) Store of Value. Show Answer Correct Answer: D) Store of Value. 6. If George keeps a part of his earnings as cash in a safety deposit box, he is employing money as a ..... A) Store of value. B) Measure of value. C) Medium of exchange. D) None is correct. Show Answer Correct Answer: A) Store of value. 7. Which of the statements gives a true picture of the effect of the central bank selling securities in the market? A) The credit creation capacity of commercial banks will fall. B) The credit creation capacity of commercial banks will rise. C) The credit creation capacity of commercial banks may rise or fall. D) There is no effect on the credit creation capacity of commercial banks. Show Answer Correct Answer: A) The credit creation capacity of commercial banks will fall. 8. How can you protect your checking account when using online and mobile banking? A) Use strong and unique passwords. B) Avoid using public Wi-Fi networks. C) Regularly monitor your account activity. D) All of the above. Show Answer Correct Answer: D) All of the above. 9. Quality of an asset that permits it to be converted quickly into cash? A) Liquidity. B) Share. C) All the above. D) None of the above. Show Answer Correct Answer: A) Liquidity. 10. Which one is used to buy things easily? A) Stones. B) Money. C) Rain. D) None of the above. Show Answer Correct Answer: B) Money. 11. What is meant by trading without money? A) Trading that requires a bank account. B) Trading without money means exchanging goods or services directly without using currency. C) Trading that involves borrowing money. D) Trading using only digital currencies. Show Answer Correct Answer: B) Trading without money means exchanging goods or services directly without using currency. 12. Name the institution which performs the functions of accepting deposits, granting loans and making investments, with the aim of earning profits. A) Commercial Bank. B) Central Bank. C) World Bank. D) None of these. Show Answer Correct Answer: A) Commercial Bank. 13. People saving for retirement want to make wise investments so their ..... will grow and they can live comfortably. A) Assets. B) Income. C) All the above. D) None of the above. Show Answer Correct Answer: A) Assets. 14. Which are not functions of a commercial bank? A) Cheque clearance and foreign exchange dealings. B) Internet banking and money transfer facilities. C) Lender of the last resort and bankers' bank. D) Loans and credit creation. Show Answer Correct Answer: C) Lender of the last resort and bankers' bank. 15. Moving money from one account to another is called a ..... A) Movement. B) Glide. C) Transfer. D) Swap. Show Answer Correct Answer: C) Transfer. 16. Which of following is not included in M1 A) Inter bank deposits. B) Currency n coins with public. C) Other deposits with RBI. D) Demand deposits with banks. Show Answer Correct Answer: A) Inter bank deposits. 17. When you pay for a new CD with a debit card, you authorize the transfer of money from your account to the music store's account. In other words, a payment by debit card is the electronic form of a payment by A) Check. B) Credit card. C) Cashier's check. D) Money order. Show Answer Correct Answer: A) Check. 18. Which is a smart money habit? A) Spending all at once. B) Not counting change. C) Saving some money. D) Buying everything you see. Show Answer Correct Answer: C) Saving some money. 19. Define the term 'barter' A) Barter is an instrument of exchange. B) Barter is the exchange of goods and services with the use of money. C) Barter is the exchange of one thing for another without the use of money. D) Barter is a rate of exchange. Show Answer Correct Answer: C) Barter is the exchange of one thing for another without the use of money. 20. How does the Reserve Bank of India (RBI) primarily use Open Market Operations (OMO) to increase the money supply? A) By increasing the Repo Rate, making commercial borrowing more expensive. B) By selling government securities to commercial banks. C) By decreasing the Statutory Liquidity Ratio (SLR) requirements. D) By buying government securities from commercial banks. Show Answer Correct Answer: D) By buying government securities from commercial banks. 21. Which of the following is a cooperative lending association for a particular group, usually employees of a specific firm? A) Commercial Bank. B) Central Bank. C) Credit Union. D) Savings & Loan Association. Show Answer Correct Answer: C) Credit Union. 22. Which is the most liquid measure of the money supply? A) M1. B) M2. C) M4. D) M3. Show Answer Correct Answer: A) M1. 23. Monetary standard under which the basic currency unit is equivalent to, and can be exchanged for, a specific amount of gold A) Monetary standard. B) Legal tender. C) Treasury coin notes. D) Gold standard. E) Inconvertible fiat money standard. Show Answer Correct Answer: D) Gold standard. 24. Emilio borrows $ 1200 from a bank with 8% simple interest per year. How much will he have to pay back total in 2 years? (I=prt, then add I to p to get the answer) A) $ 1392. B) $ 192. C) $ 150. D) $ 1350. Show Answer Correct Answer: A) $ 1392. 25. Payment of loan is: A) Capital expenditure. B) Revenue expenditure. C) Capital receipts. D) Revenue receipts. Show Answer Correct Answer: A) Capital expenditure. 26. During a discussion about the nature of money, Adi and Dewi were trying to categorize different forms of money based on their physical composition. Adi suggested that there are two primary categories of money. What did they conclude? A) Cartal money and Giral money. B) Physical money and Electronic money. C) Paper money and Metal money. D) Full bodied money and Token money. Show Answer Correct Answer: C) Paper money and Metal money. 27. What is the other name for 'Money Multiplier'? A) Credit Multiplier. B) Deposit Multiplier. C) Cash Reserve Ratio. D) None of these. Show Answer Correct Answer: B) Deposit Multiplier. 28. What are some reasons for why so many Americans live paycheck-to-paycheck? A) Low wages. B) High cost of living. C) Lack of financial education. D) All of the above. Show Answer Correct Answer: D) All of the above. 29. Common fees that may be charged by a depository institution include all EXCEPT: A) Overdraft fee. B) Late fee. C) Minimum Balance fee. D) ATM fee. Show Answer Correct Answer: B) Late fee. 30. ..... money is accepted as a medium of exchange because of the trust between the payer and the payee A) Fiat. B) Fiduciary. C) All the above. D) None of the above. Show Answer Correct Answer: B) Fiduciary. 31. Sudden rush by depositors to withdraw their deposited funds from banks A) Bank holiday. B) Bank run. C) Gold standard. D) Panic. Show Answer Correct Answer: B) Bank run. 32. Banks create credit: A) On the basis of deposits. B) On the basis of their securities. C) On the basis of their total assests. D) Out of nothing. Show Answer Correct Answer: A) On the basis of deposits. 33. Which of the following is NOT one of the 3 main responsibilities of the regional reserve banks? A) Creating banking regulations. B) Supervising commercial banks. C) Contributing to monetary policy. D) Providing financial services. Show Answer Correct Answer: A) Creating banking regulations. 34. What role does the RBI play as a banker's bank? A) The RBI acts as a direct lender to individuals and businesses. B) The RBI primarily focuses on international trade regulations. C) The RBI provides financial services to commercial banks, regulates the banking sector, and ensures liquidity. D) The RBI only issues currency notes for the government. Show Answer Correct Answer: C) The RBI provides financial services to commercial banks, regulates the banking sector, and ensures liquidity. 35. Money demand for speculative motives are influence by ..... A) Level of income. B) General price level. C) Money supply. D) Rate of interest. Show Answer Correct Answer: D) Rate of interest. 36. Which of the following statements about a gold standard is FALSE? A) The government cannot print too much paper currency. B) People feel more secure about their money. C) It is easier to expand the money supply. D) The government risks draining its gold reserves. Show Answer Correct Answer: C) It is easier to expand the money supply. 37. Brief period during which all banks closed to prevent bank runs A) Quarantine. B) National holiday. C) Bank holiday. D) Lockout. Show Answer Correct Answer: C) Bank holiday. 38. T/F:Money must be limited in supply to maintain its value. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 39. Which of the following is not the qualitative method of Credit Control? A) Consumer Credit Regulation. B) Open Market Operation. C) Margin Requirement. D) Moral Suasion. Show Answer Correct Answer: B) Open Market Operation. 40. Legally required cash reserve of the commercial bank with the central bank as a percentage of their total deposit. A) CRR. B) Marginal Requirment. C) SLR. D) Bank Rate. Show Answer Correct Answer: A) CRR. 41. What is the main function of money that allows people to save? A) Medium of exchange. B) Unit of account. C) Standard of deferred payments. D) Store of value. Show Answer Correct Answer: D) Store of value. 42. True or False? Putting your money in a savings account can earn you extra money in the form of interest? A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 43. One drawback of water exchange is A) Lack of goods. B) Lakhon coincidence of wants. C) Lack of double coincidence of wants. D) Lack of trust. Show Answer Correct Answer: C) Lack of double coincidence of wants. 44. Use of money today in a way that earns future benefits A) Investment. B) Stocks and bonds. C) All the above. D) None of the above. Show Answer Correct Answer: A) Investment. 45. Which of the four characteristics of money can be defined as "easily moved" ? A) Divisibility. B) Portability. C) Uniformity. D) Durability. Show Answer Correct Answer: B) Portability. 46. In India Currency notes are issue by A) RBI. B) SBI. C) Finance ministry. D) None. Show Answer Correct Answer: D) None. 47. The ease with which an asset can be converted into payment for goods & services. A) Banking. B) Liquidity. C) Medium of Exchange. D) Legal Tender. Show Answer Correct Answer: B) Liquidity. 48. Conceptually, anything is considered money if it functions as: A) A medium of exchange. B) A store of value. C) A unit of account. D) All of the above. Show Answer Correct Answer: D) All of the above. 49. Money in the form of coins made from silver or gold A) Fiat money. B) Specie. C) Money. D) Medium of exchange. E) Measure of value. Show Answer Correct Answer: B) Specie. 50. Credit money is increased when CRR A) Falls. B) Rises. C) Remain stable. D) None of the above. Show Answer Correct Answer: A) Falls. 51. The average coins life span is about how long? A) 10 years. B) 15 years. C) 25 years. D) 5 years. Show Answer Correct Answer: C) 25 years. 52. What do we call it when we put money in the bank? A) Deposit. B) Dancing. C) Drawing. D) Driving. Show Answer Correct Answer: A) Deposit. 53. What is the best example of an action(s) that the Federal Reserve (Fed) can take to stabilize our economy? A) Print money. B) Raise interest rates. C) Require other banks to keep a minimum balance. D) All of the above. Show Answer Correct Answer: D) All of the above. 54. Changes in the money supply CANNOT influence overall levels of spending, employment, and prices in the economy. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 55. Which of the following best describes "value for money" in a financial context? A) Minimising employee salaries. B) Spending the least amount of money possible. C) Maximising profits at any cost. D) Achieving the best possible outcome for the amount spent. Show Answer Correct Answer: D) Achieving the best possible outcome for the amount spent. 56. A Govt. Budget is prepared for a fiscal year running from: A) 1st April to 31st March. B) 1st April to 31st December. C) 1st January to 30th April. D) 1st January to 31st December. Show Answer Correct Answer: A) 1st April to 31st March. 57. ..... is a monetary system in which paper money and coins are equal to the value of a certain amount of gold. A) Fiat money. B) Representative oney. C) Gold standard. D) Fractional reserve banking. Show Answer Correct Answer: C) Gold standard. 58. A machine that allows individuals to complete certain transactions from the machine without human assistance A) LTD. B) ATM. C) LIG. D) APR. Show Answer Correct Answer: B) ATM. 59. Which of the following is a feature of a certificate of deposit (CD)? A) Funds deposited in a CD are very liquid. B) Funds deposited in a CD can be accessed via check or debit card. C) Funds deposited in a CD are held for a certain length of time. D) Funds deposited in a CD have tiered interest rates. Show Answer Correct Answer: C) Funds deposited in a CD are held for a certain length of time. 60. Money or things which can be quickly and easily converted into money with little or no loss of purchasing power. A) Liquidity. B) Default. C) Central Bank. D) Member Bank. Show Answer Correct Answer: A) Liquidity. ← PreviousNext →Related QuizzesCommerce QuizzesClass 12 QuizzesClass 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 1Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 2Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 3Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 4Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 5Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 6Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 7Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 8 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books