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 24 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 24 (60 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The businessman shopkeeper, companies and traders have ..... account in the banks A) Basic Saving Bank Deposit Account. B) Saving Bank Account. C) Current Account. D) Small Account. Show Answer Correct Answer: C) Current Account. 2. Which of the following is legal tender A) Demand deposits. B) Time deposits. C) Cheque. D) Currency notes and coins. Show Answer Correct Answer: D) Currency notes and coins. 3. What are the benefits of saving money? A) Higher interest rates on loans. B) Increased spending power. C) The benefits of saving money include financial security, investment opportunities, emergency funds, and achieving financial goals. D) Immediate gratification from purchases. Show Answer Correct Answer: C) The benefits of saving money include financial security, investment opportunities, emergency funds, and achieving financial goals. 4. What is a mortgage used to purchase? A) Real estate. B) Car. C) Business expenses. D) College tuition. Show Answer Correct Answer: A) Real estate. 5. I'm an institution which performs the function of accepting deposits, lending funds & making an investment with the main aim of profit maximization.What am I? A) Commercial Bank. B) Central Bank. C) Government. D) None of these. Show Answer Correct Answer: A) Commercial Bank. 6. What is the primary function of CRR in the banking sector? A) Accepting deposits and granting loans. B) Regulating the repo rate. C) Fixing credit quotas for different activities. D) Controlling credit creation. Show Answer Correct Answer: D) Controlling credit creation. 7. The U.S. went on the gold standard in ..... and then went off the gold standard in ..... A) 1941, 1945. B) 1787, 1811. C) 1863, 1876. D) 1900, 1933. Show Answer Correct Answer: D) 1900, 1933. 8. Which of the following sends a message to the bank to transfer money directly from your checking account into the store's bank account? A) Debit card. B) Credit card. C) Promissory note. D) Goldsmith note. Show Answer Correct Answer: A) Debit card. 9. What is the main function of money in a modern economy? A) To act as a medium of exchange. B) To act as a store of value. C) To act as a unit of account. D) All of the above. Show Answer Correct Answer: D) All of the above. 10. The business activity where money deposits are collected and transferred from one person to another A) Investing. B) Saving. C) Banking. D) All. Show Answer Correct Answer: C) Banking. 11. Which physical property of money makes flexible pricing possible? A) Portability. B) Divisibility. C) Uniformity. D) Durability. Show Answer Correct Answer: B) Divisibility. 12. Which bank publishes Indian currency? A) RBI. B) Commercial Banks. C) Cooperative Banks. D) None of these. Show Answer Correct Answer: A) RBI. 13. The maximum number of withdrawals in a month allowed in basic saving bank deposit account (BSBDA) is A) 10. B) 6. C) 4. D) 5. Show Answer Correct Answer: C) 4. 14. The relationship between the value of the deposit multiplier and the value of LRR is A) Direct. B) Inverse. C) There is no relationship between them. D) None of the above. Show Answer Correct Answer: B) Inverse. 15. Which of the following functions are performed by the commercial banks? A) Issuance of currency notes. B) Rediscounting of bills. C) Credit creation. D) Preparation of monetary policy. Show Answer Correct Answer: C) Credit creation. 16. What will be the best way to fight the slowdown brought by covid 19? A) Decrease in repo rate. B) Selling of government bonds. C) Increase in SLR. D) Increase in CRR. Show Answer Correct Answer: A) Decrease in repo rate. 17. You have invested $ 500 at 9 percent interest. According to the Rule of 72, how soon will the money double in value? (72/r = time) A) 4 years. B) 8 years. C) 6 years. D) 12 years. Show Answer Correct Answer: B) 8 years. 18. With LendUp you can ..... for a loan in as little as five minutes. A) Pay. B) Reduce. C) Apply. D) None of the above. Show Answer Correct Answer: C) Apply. 19. A 30-year bond is a more LIQUID asset compared to a 6-month treasury bill A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 20. Rs. 10 note is issued by A) SBI. B) Government of India. C) RBI. D) Ministry of Finance. Show Answer Correct Answer: C) RBI. 21. Which would be the best inflation rate? A) -4%. B) 3%. C) 15%. D) None of the above. Show Answer Correct Answer: B) 3%. 22. What is the impact of monetary policy on inflation? A) Interest rates do not influence the money supply. B) Monetary policy can increase or decrease inflation by adjusting interest rates and controlling the money supply. C) Inflation is solely determined by government spending. D) Monetary policy has no effect on inflation. Show Answer Correct Answer: B) Monetary policy can increase or decrease inflation by adjusting interest rates and controlling the money supply. 23. A market stall = ..... A) Stragan. B) Bazar. C) Kasa. D) Lada. Show Answer Correct Answer: A) Stragan. 24. When people say money is used as a 'store of value', what do they mean? A) It can be traded and exchanged easily, and split into different amounts easily. B) It's a way of comparing the relative value of different things. C) It can be saved and used at some point in the future. D) None of the above. Show Answer Correct Answer: C) It can be saved and used at some point in the future. 25. The demand curve for money ..... A) Shows the amount of money balances that businesses wish hold at various interest rates. B) Reflects the open market operations policy of the Central Bank. C) Shows the amount of money individuals and businesses wish to hold at various price levels. D) Reflects the discount rate policy of the Central Bank. Show Answer Correct Answer: D) Reflects the discount rate policy of the Central Bank. 26. Which of the following statements about the Great Depression is FALSE? A) Thousands of banks failed. B) Banking reforms followed the Great Depression. C) Runs on banks were common. D) A new banking system was created. Show Answer Correct Answer: D) A new banking system was created. 27. When you buy something online, what should you ask a parent to help you with? A) Reading reviews. B) Using a credit card. C) Finding pictures. D) Choosing colors. Show Answer Correct Answer: B) Using a credit card. 28. Dana is an artist and Poppy is a carpenter. Dana agrees to paint a portrait of Poppy's family in exchange for a table created by Poppy. How did Dana and Poppy pay for the goods in the transaction? A) Currency. B) Money. C) Bartering. D) Debit card. Show Answer Correct Answer: C) Bartering. 29. What is a family most likely to do if they want to purchase a home? A) Use a credit card. B) Open a checking account. C) Purchase a certificate of deposit. D) Get a mortgage. Show Answer Correct Answer: D) Get a mortgage. 30. What is a debit card? A) Plastic card that used to connect to bank accounts. B) Plastic card only used with specific stores. C) Used to borrow money like a credit card. D) None of the above. Show Answer Correct Answer: A) Plastic card that used to connect to bank accounts. 31. Money must be scarce. A) Store of Value. B) Limited Supply. C) Fiat Money. D) Medium of Exchange. Show Answer Correct Answer: B) Limited Supply. 32. ..... your card and ..... your PIN. A) Put / enter. B) Install / write. C) Insert / key in. D) Put / type. Show Answer Correct Answer: C) Insert / key in. 33. The function of money that provides a means for comparing the values of goods and services. A) Medium of Exchange. B) Acceptability. C) Unit of Account. D) Store of Value. Show Answer Correct Answer: C) Unit of Account. 34. How do banks earn money from loans? A) Banks earn money by charging fees for account maintenance. B) Banks earn money from loans by charging interest on the borrowed amount. C) Banks earn money by offering free loans to customers. D) Banks earn money by investing in stocks and bonds. Show Answer Correct Answer: B) Banks earn money from loans by charging interest on the borrowed amount. 35. 1 of 3 functions of money allowing people to preserve value for future use. A) Portability. B) Store of value. C) Measure of value. D) Divisibility. Show Answer Correct Answer: B) Store of value. 36. In the Mauryan period ..... a silver coin was standard currency A) Shilling. B) Pound. C) Desant. D) Pana. Show Answer Correct Answer: D) Pana. 37. It is safer to keep your money here than at home under your mattress. A) Balance. B) Want. C) Inflation. D) Bank. Show Answer Correct Answer: D) Bank. 38. Money that has value because the Government declared that it is money. A) Commodity Money. B) Fiat Money. C) Coins. D) Currency. Show Answer Correct Answer: B) Fiat Money. 39. The government budget has a revenue deficit. This gets financed by:A. Borrowings B. Disinvestment C. Tax revenue D. Indirect Tax A) A and D. B) C and D. C) A and B. D) C and D. Show Answer Correct Answer: C) A and B. 40. In what situation might a commercial bank decide to increase its lending? A) When interest rates are low. B) When they have excess liquidity. C) All of the above. D) When there is high demand for loans. Show Answer Correct Answer: C) All of the above. 41. The main difficulty in a barter system is: A) Excess supply of goods. B) Storage of money. C) Inflation. D) Double coincidence of wants. Show Answer Correct Answer: D) Double coincidence of wants. 42. When it comes to saving money, what is a good rule of thumb? A) Choose the savings account with the lowest interest rate. B) Put aside money for savings each month. C) Put anything you can't afford on your credit card. D) Keep most of your savings in your checking account. Show Answer Correct Answer: B) Put aside money for savings each month. 43. What are some examples of low-risk investments? A) Some examples of low-risk investments include savings accounts, certificates of deposit (CDs), and government bonds. B) Stocks. C) High-yield bonds. D) Cryptocurrency. Show Answer Correct Answer: A) Some examples of low-risk investments include savings accounts, certificates of deposit (CDs), and government bonds. 44. Which of the following is the apex bank of India? A) HDFC. B) RBI. C) SBI. D) PNB. Show Answer Correct Answer: B) RBI. 45. What do we call money we earn for doing work? A) Savings. B) Change. C) Income. D) Coins. Show Answer Correct Answer: C) Income. 46. ..... refer to those deposits in which amount is deposited with bank for a fixed period of time. A) Current Deposits. B) Time Deposits. C) Demand Deposits. D) Saving Deposits. Show Answer Correct Answer: B) Time Deposits. 47. La cuenta corriente A) Savings account. B) Checking account. C) Debit card. D) To deposit money. Show Answer Correct Answer: B) Checking account. 48. Carl wants a new computer. He goes to 6 different stores on the weekend comparing prices. Carl is using money as A) A unit of account. B) A medium of exchange. C) Commodity money. D) A store of value. Show Answer Correct Answer: A) A unit of account. 49. What happens where there is an increase in the margin requirements? A) It reduces the borrowing capacity and money supply. B) Encourages people to borrow more and money supply rises. C) No change in money supply. D) None of these. Show Answer Correct Answer: A) It reduces the borrowing capacity and money supply. 50. Which of the following is NOT a type of loan mentioned in the Canadian financial system? A) Unsecured loan. B) Bond loan. C) Secured loan. D) Prime rate of interest. Show Answer Correct Answer: B) Bond loan. 51. What are the risks associated with banking? A) Foreign exchange risk. B) Investment risk. C) Credit risk, market risk, operational risk, liquidity risk, regulatory risk. D) Interest rate risk. Show Answer Correct Answer: C) Credit risk, market risk, operational risk, liquidity risk, regulatory risk. 52. A commercial bank sells $ 10k in securities. The reserve requirement is 10%. How much of the money can the bank lend? A) $ 10, 000. B) $ 9, 000. C) $ 0. D) $ 1, 000. Show Answer Correct Answer: A) $ 10, 000. 53. James, William, and Ethan are playing a game of 'Economy Masters'. They are discussing how the central bank controls the money supply in an economy. Can you help them answer this? A) Fiscal policy. B) Exchange rate policy. C) Monetary policy. D) Trade policy. Show Answer Correct Answer: C) Monetary policy. 54. Which option is a characteristics of money? A) Portability. B) Store of value. C) Unit of account. D) Medium of exchange. Show Answer Correct Answer: A) Portability. 55. ..... a system in which currency could be exchanged for a certain amount of gold. A) Legal tender. B) Gold Standard. C) FDIC. D) Specie. Show Answer Correct Answer: B) Gold Standard. 56. If LRR is 50%, the value of the deposit multiplier will be: A) 4. B) 10. C) 2. D) None of the above. Show Answer Correct Answer: C) 2. 57. Which of the characteristics of money can be defined as "able to be broken down into smaller parts" ? A) Durability. B) Divisibility. C) Portability. D) Uniformity. Show Answer Correct Answer: B) Divisibility. 58. Easily transferred from 1 person to another, to make the exchange of money for products easier. A) Scarcity. B) Durability. C) Divisibility. D) Portability. Show Answer Correct Answer: D) Portability. 59. Controls the monetary base (and inflation). SBP is the Bank of Pakistan. A) Central bank. B) Commercial bank. C) All the above. D) None of the above. Show Answer Correct Answer: A) Central bank. 60. Depository institution A) Allows customers to pay for purchases directly from their checking account. B) Movement of money electronically from one financial institution or account to another. C) Any organization that provides services related to money. D) Financial institution that accepts money from customers and deposits it into the customer's account. Show Answer Correct Answer: D) Financial institution that accepts money from customers and deposits it into the customer's account. ← 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