This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 10 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 10 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is a banking service? A) Buying groceries. B) Withdrawing money. C) Sending emails. D) Depositing money. Show Answer Correct Answer: D) Depositing money. 2. If you don't have enough money to pay your bills, you ..... A) Get a loan. B) Get a refund. C) Splashes out. D) Get into debt. Show Answer Correct Answer: D) Get into debt. 3. The cowrie shells was used as money so widely because it is hard-wearing and long lasting. Which characteristics of money does this describe? A) Divisibility. B) Acceptability. C) Scarcity. D) Durability. Show Answer Correct Answer: D) Durability. 4. What effect does a decrease in the repo rate have on the economy? A) Increases borrowing costs. B) Encourages spending and investment. C) Reduces money supply. D) Increases inflation. Show Answer Correct Answer: B) Encourages spending and investment. 5. What does High Powered Money consist of? A) Only currency held by the public. B) Total deposits with commercial banks. C) Currency held by the public and cash reserves of banks. D) Only cash reserves of banks. Show Answer Correct Answer: C) Currency held by the public and cash reserves of banks. 6. The ratio of total deposits that a commercial bank has to keep with themselves is called: A) Statutory Liquidity Ratio (SLR). B) Deposit ratio. C) Cash Reserve Ratio (CRR). D) Legal Reserve Ratio (LRR). Show Answer Correct Answer: A) Statutory Liquidity Ratio (SLR). 7. When money value of money exceeds commodity value of money, it is called: A) Full bodied money. B) Credit money. C) Fiat money. D) Fiduciary money. Show Answer Correct Answer: B) Credit money. 8. What is the role of commercial banks in the money creation process? A) They lend money to individuals and businesses. B) They create credit by accepting deposits and making loans. C) They control the money supply in the economy. D) They issue currency. Show Answer Correct Answer: B) They create credit by accepting deposits and making loans. 9. The one rupee note and coins are issued by: A) RBI (Central Bank). B) Commercial Bank. C) Ministry of Finance. D) Central Government. Show Answer Correct Answer: C) Ministry of Finance. 10. Given below are two statements, one (A) and the other labelled as (B):Statement (A):M1 is considered as narrow moneyStatement (B):M1 = Currency + Net demand depositsIn the context of the above two statements, which of the following is correct? A) Both (A) and (B) are correct. B) Both (A) and (B) are incorrect. C) Only (A) is correct. D) Only (B) is correct. Show Answer Correct Answer: A) Both (A) and (B) are correct. 11. Qualitative measure of credit control A) Bank rate. B) Open market operation. C) CRR. D) Margin requirement. Show Answer Correct Answer: D) Margin requirement. 12. Why were metals preferred for use as money A) They were durable. B) They could be devided into parts and be carried around. C) They were Scarce. D) All. Show Answer Correct Answer: D) All. 13. Which of the four characteristics of money can be defined as "Consistent or Identical" ? A) Durability. B) Divisibility. C) Uniformity. D) Portability. Show Answer Correct Answer: C) Uniformity. 14. What is known as the apex institution of a country's financial and monetary system? A) Commercial Banks. B) Member Banks. C) Central Banks. D) None of the above. Show Answer Correct Answer: C) Central Banks. 15. What is a bank card used for? A) Playing games. B) Getting money. C) Drawing pictures. D) Reading books. Show Answer Correct Answer: B) Getting money. 16. What function of money enables it to be used for future purchases? A) Medium of exchange. B) Store of value. C) Unit of account. D) Measure of liquidity. Show Answer Correct Answer: B) Store of value. 17. More the CRR, more the credit creation. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 18. Who issue 1 rupee note A) RBI. B) COMMERCIAL BANK. C) MINISTRY OF FINANCE. D) ALL THE ABOVE. Show Answer Correct Answer: C) MINISTRY OF FINANCE. 19. Why does the state/government have to intervene in the market? A) To increase the role of the price mechanism in allocating resources. B) To prevent private sector firms from overcharging consumers. C) To make the distribution of income more uneven. D) To encourage the consumption of harmful products. Show Answer Correct Answer: B) To prevent private sector firms from overcharging consumers. 20. Why did the Zimbabwean dollar lose its acceptability in 2009? A) It was replaced by the US dollar. B) It was not divisible. C) The country experienced hyperinflation. D) It was not portable. Show Answer Correct Answer: C) The country experienced hyperinflation. 21. If a pen costs Rs 10 and a pencil costs Rs 2, the relative price of a pen in terms of pencils is: A) 2 pencils. B) 5 pencils. C) 10 pencils. D) 0.5 pencil. Show Answer Correct Answer: B) 5 pencils. 22. How do you pronounce 'receipt'? A) Reseet. B) Resept. C) Reseept. D) Reset. Show Answer Correct Answer: A) Reseet. 23. Double coincidence of wants is an issue associated with the system of A) Barter. B) Sale. C) Transfer. D) Donations. Show Answer Correct Answer: A) Barter. 24. Which of the following statements about the characteristics of debt and equities is TRUE? A) They can both be long-term financial instruments. B) Bond holders are residual claimants. C) The income from bonds is typically more variable than that from equities. D) Bonds pay dividends. Show Answer Correct Answer: A) They can both be long-term financial instruments. 25. Which bank enjoys monopoly power of Note issue? A) NABARD. B) Central Bank. C) Commercial Bank. D) All of the above. Show Answer Correct Answer: B) Central Bank. ← PreviousNext →Related 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 8Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 9Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books