This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 22 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 22 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which is not a use of money? A) Medium of exchange. B) A store of value. C) Unit of account. D) To start a fire. Show Answer Correct Answer: D) To start a fire. 2. If LRR is 25%, then money multiplier will be ..... A) 25 times. B) 10 times. C) 4 times. D) 0.25 times. Show Answer Correct Answer: C) 4 times. 3. How many curve in money demand? A) 3. B) 1. C) 4. D) 2. Show Answer Correct Answer: A) 3. 4. Fee charged to borrow money A) Inflation. B) Interest. C) Discount rate. D) Reserve requirement. Show Answer Correct Answer: B) Interest. 5. For which function, money is accepted as a unit of account? A) Measure of value,. B) Medium of exchange. C) Standard of deferred payment. D) Store of value. Show Answer Correct Answer: A) Measure of value,. 6. What is the role of interest rates in banking? A) Interest rates are solely determined by the stock market. B) Interest rates determine the cost of loans and the return on deposits, influencing borrowing, saving, and overall economic activity. C) Interest rates only affect government spending. D) Interest rates have no impact on savings accounts. Show Answer Correct Answer: B) Interest rates determine the cost of loans and the return on deposits, influencing borrowing, saving, and overall economic activity. 7. Expenses that do not change every month, such as rent A) Variable Expenses. B) Static Expenses. C) Fixed Expenses. D) Never Change Expenses. Show Answer Correct Answer: C) Fixed Expenses. 8. Credit multiplier is equal to A) 1/LRR* initial cash deposit. B) 1/CRR* initial cash deposit. C) 1/SLR* initial cash deposit. D) 1/MRR* initial cash deposit. Show Answer Correct Answer: A) 1/LRR* initial cash deposit. 9. Deposit creation by banks comes to an end when ..... A) Fresh deposits with bank become zero. B) Legal reserve ratio becomes zero. C) Money multiplier becomes zero. D) Total reserves equal initial deposits. Show Answer Correct Answer: D) Total reserves equal initial deposits. 10. Where is the safest place to keep your money? A) Under your pillow. B) In your pocket. C) In a bank. D) In a piggy bank. Show Answer Correct Answer: C) In a bank. 11. Short term loan designed to take advantage of people with harsh interest rates that YOU SHOULD NEVER USE is called? A) Mortgage. B) Car Loan. C) Bank Loan. D) PAYDAY LOAN. Show Answer Correct Answer: D) PAYDAY LOAN. 12. The receipts which neither create any liability nor lead to any reduction in assets are called A) Revenue receipts. B) Capital receipts. C) Both (a) and (b). D) None of these. Show Answer Correct Answer: A) Revenue receipts. 13. An important financial institution that assists in the initial sale of securities in the primary market is the A) Investment Bank. B) Commercial Bank. C) Stock Exchange. D) None of the above. Show Answer Correct Answer: A) Investment Bank. 14. Demand deposit created by the commercial bank are called A) High powered money. B) Money. C) Bank money. D) Time deposit. Show Answer Correct Answer: C) Bank money. 15. Where does fiat money get its value? A) From the commodity money found in storage. B) From gold reserves in vaults. C) From the U.S government. D) From the Bureau of Engraving and the U.S Mint. Show Answer Correct Answer: C) From the U.S government. 16. Piggy bank A) Sparschwein. B) Bank Austria. C) Schweinebank. D) Schweinestall. Show Answer Correct Answer: A) Sparschwein. 17. ..... refers to that portion of the total deposit of a commercial bank which it has to keep with itself in the form of liquid assets. A) Cash Reserve Ratio. B) Statutory Liquidity Ratio. C) Bank Rate. D) Repo Rate. Show Answer Correct Answer: B) Statutory Liquidity Ratio. 18. Which of the following is a step that the central bank will take to increase the overall availability of credit? A) It will sell the government securities in the market. B) It will buy more government securities from the market. C) It will raise the reverse repo rate. D) It will raise the repo rate. Show Answer Correct Answer: A) It will sell the government securities in the market. 19. All of the following were used as money before, except: A) Whale teeth. B) Salt. C) Copper. D) Mirrors. Show Answer Correct Answer: D) Mirrors. 20. Why does the Federal Reserve adjust loan interest rates? A) To control the number of loans taken by the public. B) To manage the supply of "stuff" and prevent excessive inflation. C) To ensure that the economy grows as fast as possible. D) To increase the amount of money in circulation. Show Answer Correct Answer: B) To manage the supply of "stuff" and prevent excessive inflation. 21. How does the RBI regulate the banking sector? A) By controlling interest rates only. B) By providing loans to all individuals directly. C) By managing foreign exchange rates exclusively. D) The RBI regulates the banking sector by setting monetary policy, issuing operational guidelines, conducting audits, and ensuring compliance. Show Answer Correct Answer: D) The RBI regulates the banking sector by setting monetary policy, issuing operational guidelines, conducting audits, and ensuring compliance. 22. The fact that money can withstand the wear and tear that comes from being used over and over again is a measure of its A) Portability. B) Currency. C) Durability. D) Uniformity. Show Answer Correct Answer: C) Durability. 23. What is another word for money that starts with "c" ? A) Cash. B) Dollars. C) Wallet. D) Purse. Show Answer Correct Answer: A) Cash. 24. Non-depository institution A) Money placed into an account. B) Nonprofit financial institution that is privately owned and provides banking services for its members. C) Financial institution that offers savings and loan services. D) Financial institution that does not accept deposits. Show Answer Correct Answer: D) Financial institution that does not accept deposits. 25. Money is demanded for speculative motives in order to ..... A) Generate profit from the change in price of bonds and speculated change in interest. B) Overcome any uncertainty in the price of goods and services. C) Purchase goods and services that are difficult to obtain in the market. D) Avoid the risk of a drop in the value of money. Show Answer Correct Answer: A) Generate profit from the change in price of bonds and speculated change in interest. ← 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