This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 20 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 20 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Currency should be portable. This means: A) You can carry it easily. B) It was originally designed in a port. C) It is either rectangular or circular. D) It is made out of paper. Show Answer Correct Answer: A) You can carry it easily. 2. What is the main difference between Bank Rate and Repo Rate? A) Collateral requirement for loans. B) Duration of loans offered. C) Relationship to credit creation. D) Involvement in government securities. Show Answer Correct Answer: C) Relationship to credit creation. 3. How did the Financial Services Act of 1999 affect the banking industry? A) It ended restrictions on interstate banking and on the number of branches banks could have. B) It led to numerous mergers as banks tried to enter new geographic markets. C) It allowed banks, investment companies, and insurance companies to sell the same products. D) It let banks cut costs by providing fewer services to small customers. Show Answer Correct Answer: C) It allowed banks, investment companies, and insurance companies to sell the same products. 4. Term deposits are those: A) Against which on cheque can be issued. B) Against which no interest is paid to the depositors. C) Which are a part of M1 supply of money. D) None of these. Show Answer Correct Answer: A) Against which on cheque can be issued. 5. Which coin is worth 25 cents? A) Nickel. B) Dime. C) Penny. D) Quarter. Show Answer Correct Answer: D) Quarter. 6. Supply for money:There are several definitions of the supply of money.An even broader measure of the money supply is ..... , which includes all of M2 plus large denomination, long-term time deposits-for example, certificates of deposit (CDs) in amounts over $ 100, 000. A) M1. B) M2. C) M3. D) None of the above. Show Answer Correct Answer: C) M3. 7. If the reserve ratio is 25% and Ray deposits $ 100 in the bank the result will be A) $ 400 in money creation. B) $ 100 in money creation. C) $ 400 in money destruction. D) $ 100 in money destruction. Show Answer Correct Answer: A) $ 400 in money creation. 8. The process of directly exchanging one good or service for another. A) Trade. B) Bartering. C) Market. D) None of the above. Show Answer Correct Answer: B) Bartering. 9. Which of the following is the biggest disadvantage of using sea shells instead of coins as money? A) Durability. B) Uniformity. C) Portability. D) Value. Show Answer Correct Answer: B) Uniformity. 10. Financial experts recommend that before you start investing you should have a ..... in place for emergencies. A) Debt. B) Loan. C) Safery net. D) None of the above. Show Answer Correct Answer: C) Safery net. 11. Functions of Money:Money must serve as a ..... This means that if money is usable today to make purchases, it must also be acceptable to make purchases today that will be paid in the future. A) Medium of exchange. B) Store of value. C) Unit of account. D) Standard of deferred payment. Show Answer Correct Answer: D) Standard of deferred payment. 12. Currency issued by authority is. A) Fiduciary Money. B) Fiat money. C) Both (a) and (b). D) None. Show Answer Correct Answer: B) Fiat money. 13. Which of the following is the function of Central Bank A) Bankers' Bank. B) Accepting deposits from the general public. C) Giving loans to general public. D) Credit creation. Show Answer Correct Answer: A) Bankers' Bank. 14. The Congress of the United States printed Greenbacks to help fund the A) Korean War. B) Civil War. C) World War I. D) Spanish-American War. Show Answer Correct Answer: B) Civil War. 15. Which reserves do banks use to loan out to borrowers? A) Excess. B) Required. C) Total. D) Liquid. Show Answer Correct Answer: A) Excess. 16. How do banks make money from the loans they give? A) They hold the borrower's property as collateral. B) They charge for storing the loan papers in safe deposit boxes. C) They invest the reserves the Fed requires them to keep. D) They charge interest for the loans. Show Answer Correct Answer: D) They charge interest for the loans. 17. The process of credit creation is done by A) Commercial banks. B) Central Bank. C) World Bank. D) Rural Bank. Show Answer Correct Answer: A) Commercial banks. 18. The goal of the Federal Reserve System is to help the economy achieve stable prices, full employment, and economic growth. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 19. Which is the function of commercial bank? A) Lend money to the government. B) Accepting deposits and provide loans. C) Print money. D) Control the interest rate of the banks. Show Answer Correct Answer: B) Accepting deposits and provide loans. 20. Which of these people works at a bank? A) Chef. B) Teller. C) Teacher. D) Driver. Show Answer Correct Answer: B) Teller. 21. Currency held by the public and cash reserves with the banks are included in: A) M1 measure of money supply. B) High powered money. C) Legal tender money. D) None of the above. Show Answer Correct Answer: B) High powered money. 22. Commercial Bank in India includes A) Scheduled bank which have been included in the II schedule of RBI Act 1934. B) Non Scheduled banks which have not been included in the II schedule of RBI. C) Both of the above. D) None of the above. Show Answer Correct Answer: C) Both of the above. 23. Suppose the cash reserve ratio (CRR) mandated by the RBI is 10%, and HDFC Bank receives deposits worth Rs. 1, 000 crore. How much should the bank keep in reserve as per the CRR? A) Rs. 100 crore. B) Rs. 150 crore. C) Rs. 200 crore. D) Rs. 250 crore. Show Answer Correct Answer: A) Rs. 100 crore. 24. What does the M in M-banking stands for? A) Money. B) Message. C) Mobile. D) Mutual fund. Show Answer Correct Answer: C) Mobile. 25. Which of the following is a type of deposit account? A) Loan account. B) Savings account. C) Credit account. D) Investment account. Show Answer Correct Answer: B) Savings account. ← 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