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 25 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 25 (15 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The fee charged for the right to borrow money A) Loan. B) Deposit. C) Interest. D) Withdraw. Show Answer Correct Answer: C) Interest. 2. A type of money which has no value as a commodity and does not represent a claim to any physical commodity is ..... A) Representative full bodied money. B) Commodity money. C) Full bodied money. D) Fiat money. Show Answer Correct Answer: D) Fiat money. 3. Priya, Abigail, and Ethan are having a friendly debate about the best strategies for saving money in high school. Can you help them settle the debate? A) They should take out loans to cover expenses, spend money on luxury items, and rely on their parents for financial support. B) They should create a budget, avoid unnecessary expenses, save on transportation costs, and find part-time jobs or freelance work. C) All the above. D) None of the above. Show Answer Correct Answer: B) They should create a budget, avoid unnecessary expenses, save on transportation costs, and find part-time jobs or freelance work. 4. In India one rupee note is issue by A) RBI. B) Finance ministery. C) SBI. D) None. Show Answer Correct Answer: B) Finance ministery. 5. If the Fed set the reserve requirement at 20%, the money multiplier would be A) 4. B) 10. C) 5. D) Indeterminant. Show Answer Correct Answer: C) 5. 6. Which type of interest would you prefer if you are paying interest? A) Simple. B) Compound. C) All the above. D) None of the above. Show Answer Correct Answer: A) Simple. 7. The goal of monetary policy is to A) Sell bonds. B) Reduce unemployment. C) Seek price stability. D) Red and blue. Show Answer Correct Answer: C) Seek price stability. 8. What is the purpose of the Bank Rate? A) Providing loans to the government. B) Controlling the supply of money in the economy. C) Lending money to commercial banks. D) Selling government securities. Show Answer Correct Answer: B) Controlling the supply of money in the economy. 9. When people say money is used as a 'form of payment', 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: A) It can be traded and exchanged easily, and split into different amounts easily. 10. What is the usual reason why citizens trust their country's banknotes? A) They are acceptable for trade and exchange. B) They are backed by gold at the central bank. C) They are convertible into the US$ or Chinese Yuan. D) They are recognisable and in infinite supply. Show Answer Correct Answer: A) They are acceptable for trade and exchange. 11. When money serves as a mechanism for transforming current income into future purchases, it is functioning as a A) Medium of exchange. B) Standard of value. C) Standard of account. D) Store of value. Show Answer Correct Answer: D) Store of value. 12. If the nominal interest raises from 4% to 7% then the A) Expected inflation fell by 3%. B) Real interest rate must rise. C) Real interest rate fell by 4%. D) Expected inflation rose by 3%. Show Answer Correct Answer: D) Expected inflation rose by 3%. 13. What will be the effect of increase in the Repo Rate on the money supply? A) Money supply will increase. B) Money supply will decrease. C) Money supply will remain same. D) Money supply will initially increase and then it will decrease. Show Answer Correct Answer: B) Money supply will decrease. 14. Commercial bank creat credit money by way of ..... A) Time deposit. B) Treasury Bill. C) Bill of Exchange. D) Demand deposit. Show Answer Correct Answer: D) Demand deposit. 15. How does money facilitate trade and exchange of goods and services? A) Money is only used for paying taxes. B) Money serves as a medium of exchange, allowing people to easily trade goods and services without the need for bartering. C) Money is only used for buying luxury items. D) Money is used for building houses and infrastructure. Show Answer Correct Answer: B) Money serves as a medium of exchange, allowing people to easily trade goods and services without the need for bartering. ← PreviousRelated 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