This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 17 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 17 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following best defines Commodity Money? A) Money that is printed on paper but backed by gold reserves. B) An item that has intrinsic value, besides its use as a medium of exchange. C) Money that is declared legal tender by government decree. D) Money that can only be used to purchase a specific category of goods. Show Answer Correct Answer: B) An item that has intrinsic value, besides its use as a medium of exchange. 2. What is a common service provided by commercial banks beyond accepting deposits? A) Managing the national debt. B) Controlling the money supply. C) Issuing government bonds. D) Providing insurance. Show Answer Correct Answer: D) Providing insurance. 3. How is money a store of value? A) It is a means by which items can be exchanged. B) Goods and services can be measured by the dollar. C) People can use it to measure the relative cost of goods. D) It can be saved and spent in the future. Show Answer Correct Answer: D) It can be saved and spent in the future. 4. Which is not a function of a central bank? A) The facilitation of company growth. B) The government's bank. C) The lender of last resort. D) The sole issuer of bank notes and coins in the country. Show Answer Correct Answer: A) The facilitation of company growth. 5. Money overcomes issues of barter system A) Can't say. B) Seldom. C) Zero. D) 1. Show Answer Correct Answer: D) 1. 6. How does the RBI act as a banker to the government? A) The RBI acts as a banker to the government by managing its accounts, facilitating transactions, and providing financial services. B) The RBI does not manage government accounts. C) The RBI only provides loans to private banks. D) The RBI acts as a financial advisor to the government. Show Answer Correct Answer: A) The RBI acts as a banker to the government by managing its accounts, facilitating transactions, and providing financial services. 7. Who was Harshad Mehta A) A Robber. B) A Bank Owner. C) A Businessman. D) A Stock Broker. Show Answer Correct Answer: D) A Stock Broker. 8. The formula used for calculating money multiplier: A) 1/CRR. B) 1/SLR. C) 1/LRR. D) All of the above. Show Answer Correct Answer: C) 1/LRR. 9. When the money supply increases, nominal interest rate will A) Increase. B) Decrease. C) Remain the same. D) Shift left. Show Answer Correct Answer: B) Decrease. 10. Which bank controls the banking and monetary structure of India? A) Reserve Bank of India. B) State Bank of India. C) World Bank. D) Axis Bank. Show Answer Correct Answer: A) Reserve Bank of India. 11. Money is functioning as a standard of value when you A) Use it to compare two houses that are different prices. B) Buy jeans at the mall. C) Buy a rare baseball card that you expect will increase in value. D) Trade a cup of sugar for two eggs. Show Answer Correct Answer: A) Use it to compare two houses that are different prices. 12. Money is backed by our faith that others will accept it from us in exchange for goods and services A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 13. ..... is the rate of interest charged by the central bank on loan giving to the commercial bank A) Bank rate. B) Cash reserve ratio. C) Statutory liquidity ratio. D) Reverse repo rate. Show Answer Correct Answer: A) Bank rate. 14. Which of the following is not the part of the money supply? A) Currency notes held with the public. B) Coins held with the public. C) Term deposits with commercial banks. D) Demand deposits. Show Answer Correct Answer: C) Term deposits with commercial banks. 15. The system of exchanging goods directly against other goods without the use of money is called A) Bargain system. B) Cash system. C) Barter system. D) Monetary system. Show Answer Correct Answer: C) Barter system. 16. Kim K. deposits $ 200 in her checking account. Later that day Kanye gets a loan for $ 3, 000 from the same bank. What happens to the money supply A) Increases by $ 200. B) Increases by $ 2800. C) Decreases by $ 3000. D) Increases by $ 3000. Show Answer Correct Answer: D) Increases by $ 3000. 17. When you take money out of the bank, it's called: A) Withdrawal. B) Saving. C) Counting. D) Shopping. Show Answer Correct Answer: A) Withdrawal. 18. Earnings through advertising on the Internet-an affordable way to ..... income. A) Charge. B) Reduce. C) Generate. D) None of the above. Show Answer Correct Answer: C) Generate. 19. Government bond A) Anything of value that is accepted in return for goods or services. B) Document that guarantees the payment of a specific amount of money, either on demand, or at a set time with the payer named on the document. C) Type of financial investment issued by a corporation, government, or other organization. D) Security that pays interest over terms of ten to thirty years. Show Answer Correct Answer: D) Security that pays interest over terms of ten to thirty years. 20. The component not included in money supply A) Currency with private individuals. B) Currency with business firms. C) Stock of gold with RBI. D) All of these. Show Answer Correct Answer: C) Stock of gold with RBI. 21. A cashless society uses: A) Only barter. B) Only gold coins. C) Digital transactions. D) Cheques only. Show Answer Correct Answer: C) Digital transactions. 22. Which characteristic of money ensures it is not easily copied or forged? A) Uniformity. B) Scarcity. C) Durability. D) Acceptability. Show Answer Correct Answer: B) Scarcity. 23. Stocks are investments that help people increase their assets. A) TRUE. B) FALSE. C) All the above. D) None of the above. Show Answer Correct Answer: A) TRUE. 24. Which of the following is a characteristic that makes an item unsuitable to act as money? A) It is recognizable. B) It is generally acceptable. C) It is easy to carry. D) It is perishable. Show Answer Correct Answer: D) It is perishable. 25. What is the role of the central bank in an economy? A) To create credit for businesses. B) To accept deposits from the public. C) To provide loans to individuals. D) To issue currency. Show Answer Correct Answer: D) To issue currency. ← 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 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books