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 22 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 22 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Who among the following issues Re.1 currency note? A) Prime Minister. B) President. C) RBI. D) Ministry of Finance, Government of India. Show Answer Correct Answer: D) Ministry of Finance, Government of India. 2. What were early forms of money? A) Bank notes. B) Credit cards. C) Digital currencies. D) Grains, cattle, and precious metals. Show Answer Correct Answer: D) Grains, cattle, and precious metals. 3. Other things being equal, a decrease in the money supply is likely to ..... A) Increase bond price. B) Increase holding of liquidity assets. C) Reduce interest rate. D) Increase the velocity of money. Show Answer Correct Answer: C) Reduce interest rate. 4. A financial action taken today that will create financial benefits in the future? A) Maturity. B) Investment. C) Portfolio. D) Buying a Ski Doo. Show Answer Correct Answer: B) Investment. 5. What is the main source of income for commercial banks? A) Issuing currency. B) Selling foreign exchange. C) Extending loans and advances. D) Accepting deposits. Show Answer Correct Answer: C) Extending loans and advances. 6. What is the purpose of understanding the different kinds of financial institutions in Canada? A) To identify their role in the Canadian financial system and the services they offer. B) To determine which institution is the largest. C) To compare their interest rates. D) To evaluate their international presence. Show Answer Correct Answer: A) To identify their role in the Canadian financial system and the services they offer. 7. Why are doctors paid more than nurses A) They are smarter. B) They are poorer. C) They have high demand. D) None of the above. Show Answer Correct Answer: C) They have high demand. 8. When was the great recession? A) 1999. B) 2005. C) 2008. D) 2010. Show Answer Correct Answer: C) 2008. 9. Safe deposit boxes in a bank is used to ..... A) Clear the cheques. B) Access to internet banking. C) Transfer money to oversea. D) Keep valuable things. Show Answer Correct Answer: D) Keep valuable things. 10. Who is most likely to be hurt by inflation? A) The U.S. government. B) A business owner. C) A retiree on a fixed income. D) Someone who borrowed money. Show Answer Correct Answer: C) A retiree on a fixed income. 11. Rule stating that a percentage of every deposit be set aside as legal reserves A) Discount rate. B) Reserve requirement. C) Monetary policy. D) Margin requirements. Show Answer Correct Answer: B) Reserve requirement. 12. Value that is based on an opinion of a person, society, etc. is what type of value? A) Economic value. B) Intrinsic value. C) Speculative value. D) Subjective value. Show Answer Correct Answer: D) Subjective value. 13. What is the definition of money? A) It is a medium of exchange for the purchase of goods and services. B) It is a system of swapping items in exchange for another item. C) It is a system used to purchase goods only. D) It is a medium used to swap item with another trader. Show Answer Correct Answer: A) It is a medium of exchange for the purchase of goods and services. 14. Depositor-owned financial organization operated only for the benefit of its depositors A) Federal Reserve System. B) Thrift institution. C) Mutual savings bank. D) Credit union. E) Savings and loan association. Show Answer Correct Answer: C) Mutual savings bank. 15. What best describes electronic money? A) Physical currency used for online transactions. B) A digital form of fiat money accessible via computers and the internet. C) Money exclusively used through credit and debit cards. D) Funds that must be linked to a traditional bank account for exchange. Show Answer Correct Answer: B) A digital form of fiat money accessible via computers and the internet. 16. Bradley digs out $ 50 from his cookie jar and deposits it in his checking account. The immediate result of this transaction is that M1 has A) Increased by less than $ 50. B) Not changed. C) Increased by more than $ 50. D) Increased by $ 50. Show Answer Correct Answer: B) Not changed. 17. The potential amount of money that banks can create based on the initial deposit. A) Bank Failures. B) Open Market Operations. C) Potential Money Creation Formula. D) Money Multiplier. Show Answer Correct Answer: D) Money Multiplier. 18. Anna invested $ 2, 500 at an annual rate of 5%. How long will it take until Anna earns $ 1, 125 in interest? A) 8 years. B) 9 years. C) 5 years. D) 10 years. Show Answer Correct Answer: B) 9 years. 19. Money by government decree, has no alternative value or use as a commodity A) Commodity. B) Fiat. C) Specie. D) Counterfeit. Show Answer Correct Answer: B) Fiat. 20. The federal agency that insures bank deposits in the event of a bank failure is the A) FDIC. B) DDA. C) FSLIC. D) Fed. Show Answer Correct Answer: A) FDIC. 21. What is a commercial bank? A) A government bank. B) A banker's bank. C) A retail bank operated for profit. D) None of the above. Show Answer Correct Answer: D) None of the above. 22. Make long-term loans from several short-term deposits (maturity transformation).Collect information of savers and borrowers and take care of their needs.Sell and buy foreign currencies and financial instruments. A) Central bank. B) Commercial bank. C) All the above. D) None of the above. Show Answer Correct Answer: B) Commercial bank. 23. A period of time when a shop reduces the price of its products is a ..... A) Sale. B) Salesperson. C) Cashpoint. D) Discount. Show Answer Correct Answer: A) Sale. 24. Money refer to ..... A) The value of paper money in the economy. B) The value of all coins and currency in circulation at anytime. C) The amount of money that people hold is negatively related with the interest rate. D) Anything that is generally accepted as a medium of exchange. Show Answer Correct Answer: D) Anything that is generally accepted as a medium of exchange. 25. What is the most significant and traditional function of Commercial Banks? A) Provide loans. B) Accepting deposits. C) Provide discounting of bills. D) Provide overdrafts. Show Answer Correct Answer: B) Accepting deposits. 26. The notes in the wallet were all ..... American dollars. A) Mock. B) Counterfeit. C) False. D) Mimic. Show Answer Correct Answer: B) Counterfeit. 27. Which coin is the smallest? A) Quarter. B) Penny. C) Dime. D) Nickel. Show Answer Correct Answer: B) Penny. 28. ..... is money by government decree, has no alternative value A) Gold standard. B) Specie. C) Barter. D) Fiat money. Show Answer Correct Answer: D) Fiat money. 29. Which of the following is a positive aspect of using a credit card? A) The interest charged on credit cards is lower than interest on all other types of loans. B) With a credit card, money is automatically deducted from the user's bank account. C) Using a credit card allows consumers to buy goods even if they don't have cash. D) Credit cards bills can quickly add up if the consumer only pays the minimum. Show Answer Correct Answer: C) Using a credit card allows consumers to buy goods even if they don't have cash. 30. To trade goods or services without the use of money is ..... A) Trading. B) Debt. C) Economy. D) Bartering. Show Answer Correct Answer: D) Bartering. 31. An ..... operation is a purchase or sale of government debt by the Fed. A) Closed-Market. B) Open-Market. C) Central. D) Discount Window. Show Answer Correct Answer: B) Open-Market. 32. Money functions as all of the following EXCEPT A) A store of value. B) A monetary standard. C) A medium of exchange. D) A measure of value. Show Answer Correct Answer: B) A monetary standard. 33. Which of following is no the function of the central bank? A) Lending to government. B) Banking facilities to government. C) Lending to commercial banks. D) Banking facilities to public. Show Answer Correct Answer: D) Banking facilities to public. 34. Which account is the least liquid? A) Savings Account. B) Checking Account. C) Certificate of Deposit. D) Money Market Deposit Account. Show Answer Correct Answer: C) Certificate of Deposit. 35. Another advantage of borrowing money online is the lower ..... rate. A) Interest. B) Income. C) Safety net. D) None of the above. Show Answer Correct Answer: A) Interest. 36. When you pay for a new CD with a debit card, you are using the electronic form of a payment by A) Cashier's check. B) Personal check. C) Money order. D) Credit card. Show Answer Correct Answer: B) Personal check. 37. Money that can be easily divided into smaller units of value has the characteristic of A) Exchange. B) Divisibility. C) Durability. D) Denominations. Show Answer Correct Answer: B) Divisibility. 38. The primary role of the Federal Reserve Bank is to steer the economy by A) Controlling the money supply. B) Setting spending levels. C) Controlling the budget. D) Loaning out money. Show Answer Correct Answer: A) Controlling the money supply. 39. What do digital payment options like UPI and NEFT provide? A) Physical cash transactions. B) Loan approvals. C) Convenient and efficient banking. D) Barter exchanges. Show Answer Correct Answer: C) Convenient and efficient banking. 40. Which of the following is NOT an example of M1 money? A) Travelers' checks. B) A checking account. C) Currency. D) Mutual fund. Show Answer Correct Answer: D) Mutual fund. 41. This is a system where a reserve, or part, of a deposit needs to be kept on hand. A) Multiplier effect. B) Fractional reserve system. C) Primary reserve. D) Aggregate Measures. Show Answer Correct Answer: B) Fractional reserve system. 42. What are some different types of investments? A) Investing in a new business. B) Some different types of investments include stocks, bonds, mutual funds, real estate, and commodities. C) Types of investments include collecting rare coins. D) Purchasing luxury items. Show Answer Correct Answer: B) Some different types of investments include stocks, bonds, mutual funds, real estate, and commodities. 43. Legal Reserve Requirement includes A) Cash reserve ratio. B) Statutory reserve ratio. C) Both CRR and SLR. D) Government securities. Show Answer Correct Answer: C) Both CRR and SLR. 44. U.S. money today has value because the government has ordered it as acceptable means to pay debts. A) Currency. B) Commodity money. C) Representative money. D) Fiat money. Show Answer Correct Answer: D) Fiat money. 45. Pedir un prestamo A) To play off debt. B) To cash in a check. C) Bank. D) To apply for a loan. Show Answer Correct Answer: D) To apply for a loan. 46. Statistical definitions of Supply of Money:Currency in circulation and overnight deposits. Currency = bank notes + coins. A) M1. B) M2. C) M3. D) None of the above. Show Answer Correct Answer: A) M1. 47. A monetary system in which paper money and coins are equal to the value of a certain amount of gold A) Money Supply. B) Gold Standard. C) National Bank. D) Bank. Show Answer Correct Answer: B) Gold Standard. 48. Which of the following statements is true about the Indian monetary system? A) The Indian monetary system is based on the gold standard. B) The Indian monetary system is based on the credit money standard. C) The Indian monetary system is based on the minimum reserve system. D) The Indian monetary system is based on the metallic standard. Show Answer Correct Answer: C) The Indian monetary system is based on the minimum reserve system. 49. Which of the following is a tool used by the central bank to control money supply? A) Open Market Operations. B) Public Expenditure. C) Import Tariffs. D) Taxation. Show Answer Correct Answer: A) Open Market Operations. 50. Michael, Abigail, and Luna are planning to start a small business. They need a bank that primarily serves individuals and small businesses. Which type of bank should they approach? A) Investment bank. B) Central bank. C) Commercial bank. D) Retail bank. Show Answer Correct Answer: D) Retail bank. 51. How does exchange with money differ from barter? A) Exchange with money is more flexible and efficient than barter. B) Barter is always faster than using money. C) Money is less widely accepted than barter. D) Barter requires a currency exchange. Show Answer Correct Answer: A) Exchange with money is more flexible and efficient than barter. 52. A person makes $ 500 a week and receives a paycheck of $ 447. The amounts of $ 500 and $ 447 represent the person's ..... and ..... A) Gross pay; net pay. B) Hourly rate; wages. C) Net Pay; commission. D) Bonus; take home pay. Show Answer Correct Answer: A) Gross pay; net pay. 53. With rationing of credit, supply of money is reduced A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 54. Who prints money in India? A) Reserve Bank of India. B) State Bank of India. C) Finance Ministry. D) Central Bank of India. Show Answer Correct Answer: A) Reserve Bank of India. 55. The loan a bank gives you to purchase a house is called a ..... A) Equity Loan. B) Building Loan. C) Default Loan. D) Mortgage. Show Answer Correct Answer: D) Mortgage. 56. What do we call paper money? A) Pages. B) Cards. C) Bills. D) Leaves. Show Answer Correct Answer: C) Bills. 57. All of the following are examples of M2 EXCEPT A) Savings deposits. B) Demand deposits. C) Small denomination time deposits. D) The total of all M1. Show Answer Correct Answer: B) Demand deposits. 58. ..... is the rate at which commercial banks borrow short term funds from the central bank by selling their financial securities to the central bank A) SLR. B) Bank rate. C) Repo rate. D) CRR. Show Answer Correct Answer: C) Repo rate. 59. Find money multiplier if initial deposit of Rs.200 crore lead to creation of total deposits of Rs 1600 crores A) 4. B) 8. C) 5. D) 6. Show Answer Correct Answer: B) 8. 60. Which of the following agency is responsible for issuing Rs. 1 currency notes? A) Niti Aayog. B) Reserve bank of India. C) Ministry of Finance. D) Ministry of Commerce. Show Answer Correct Answer: C) Ministry of Finance. ← 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