This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 19 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 19 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. You will need to provide a lot of paperwork in order to take ..... a mortgage. A) In. B) Out. C) Off. D) None of the above. Show Answer Correct Answer: B) Out. 2. What is the primary purpose of the central bank's monetary policy? A) To control and regulate money supply. B) To provide loans to businesses. C) To regulate the stock market. D) To issue new currency. Show Answer Correct Answer: A) To control and regulate money supply. 3. An individual may hold her wealth in the form of landed property, bonds, equity markets.Which is this form of demand of money? A) Transactive motive. B) Speculative motive. C) Liquidity trap. D) Medium of exchange. Show Answer Correct Answer: B) Speculative motive. 4. One cause for people holding money is to pay for unexpected medical bills and other unpredictable expenses. This motive for holding money is called ..... A) Transaction motive. B) Precautionary motive. C) Speculative motive. D) Spending motive. Show Answer Correct Answer: B) Precautionary motive. 5. Goods and services that can increase our quality of life but are not absolutely necessary for our survival A) Need. B) Want. C) Opportunity cost. D) Value. Show Answer Correct Answer: B) Want. 6. Which of the following is an example of money as a unit of account? A) Purchasing a toy for $ 8.99. B) Lending a friend $ 25.00. C) Opening a saving account at a bank. D) Checking the price of a camera at several stores before buying it at the lowest price. Show Answer Correct Answer: D) Checking the price of a camera at several stores before buying it at the lowest price. 7. Money is the most liquid of all the asset because A) It is a medium of exchange. B) It is an unit of account. C) It act as a store of value. D) It is a standard of deferred payment. Show Answer Correct Answer: A) It is a medium of exchange. 8. What is the purpose of money? A) To serve as a medium of exchange, a unit of account, and a store of value. B) To create inequality. C) To control the economy. D) To be used as a form of decoration. Show Answer Correct Answer: A) To serve as a medium of exchange, a unit of account, and a store of value. 9. What do we call money we save for emergencies? A) Pocket money. B) Savings. C) Allowance. D) Change. Show Answer Correct Answer: B) Savings. 10. The demand for money consists of A) M1 plus M2. B) The tools of the Fed. C) Asset demand plus transactions demand. D) Checkable deposits and savings accounts. Show Answer Correct Answer: C) Asset demand plus transactions demand. 11. What is a piggy bank used for? A) Eating food. B) Playing games. C) Saving money. D) Drawing pictures. Show Answer Correct Answer: C) Saving money. 12. What is savings? A) Income not spent on immediate wants. B) Use of money today in a way that earns future benefits. C) Percentage of the total amount of money loaned or borrowed. D) Things of economic value that a person or company owns. Show Answer Correct Answer: A) Income not spent on immediate wants. 13. Can I pay ..... credit card? A) With. B) By. C) For. D) By. Show Answer Correct Answer: B) By. 14. What would happen of a commercial bank decided to hold more than required reserves? A) Decrease in checking accounts. B) Decrease the amount of potential loans made by the bank. C) Increase the interest rate offered by the bank. D) Decrease the reserve ratio of the banking system. Show Answer Correct Answer: B) Decrease the amount of potential loans made by the bank. 15. Currency notes and coins are called as: A) Flat Money. B) Legal tender. C) Fiat money. D) Both legal tender and fiat money. Show Answer Correct Answer: D) Both legal tender and fiat money. 16. If CRR is 5% SLR 20 %, money multiplier is A) 4. B) 5. C) 20. D) None of these. Show Answer Correct Answer: A) 4. 17. What is the purpose of a loan? A) To create debt. B) To increase financial burden. C) To provide financial assistance. D) To hinder financial stability. Show Answer Correct Answer: C) To provide financial assistance. 18. Supply of money refers to quantity of money A) As on 31st march. B) As on any point of time. C) During fiscal year. D) During period of time. Show Answer Correct Answer: B) As on any point of time. 19. Money spent in order to make more money A) Income. B) Interest. C) Investment. D) Entrepreneur. Show Answer Correct Answer: C) Investment. 20. What is one of the primary roles of a central bank? A) Controlling the money supply. B) Deciding on the amount of government expenditure. C) Issuing shares. D) Raising taxes. Show Answer Correct Answer: A) Controlling the money supply. 21. Which of the following is/are the purpose of money demand influenced by the level of income? A) Transaction motive. B) Precautionary motive. C) Speculative motive. D) Transaction and precautionary motive. Show Answer Correct Answer: B) Precautionary motive. 22. In order to reduce credit in the country, RBI may: A) Buy securities in the open market. B) Sell securities in the open market. C) Reduce cash reserve ratio. D) Reduce Repo Rate. Show Answer Correct Answer: B) Sell securities in the open market. 23. ..... refers to objects that have value because the holder can exchange them for something else of value. A) Representative money. B) Fiat money. C) Commodity money. D) Barter. Show Answer Correct Answer: A) Representative money. 24. What were "greenbacks?" A) Paper currency used by the Confederacy during the Civil War. B) Copper coins used by the Confederacy during the Civil War. C) Paper currency used by the Union during the Civil War. D) Privately issued currency used by the Union during the Civil War. Show Answer Correct Answer: C) Paper currency used by the Union during the Civil War. 25. One of the main functions of banks is A) Borrowing money and lending to savers. B) Creating money. C) Ownership of projects in which they invest. D) Maintaining a constant money supply. Show Answer Correct Answer: B) Creating money. ← 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