This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 24 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 24 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is NOT a role of money? A) Durable and portable. B) Perishable and heavy. C) Commonly accepted. D) Acts as an intermediary. Show Answer Correct Answer: B) Perishable and heavy. 2. Money supply includes A) All deposits in banks. B) Only time deposits. C) Only demand deposits. D) Currency with bank. Show Answer Correct Answer: C) Only demand deposits. 3. Please complete the ..... form and return it to the branch manager. A) Enclosed. B) Added. C) Inserted. D) Annexed. Show Answer Correct Answer: A) Enclosed. 4. Money acts as a store of value only if: A) Price level is unstable. B) Value of money is stable. C) It is perishable. D) It is in barter form. Show Answer Correct Answer: B) Value of money is stable. 5. The problem of moral hazard in case of debt contracts can be avoided with A) Pledging of collaterals against debts. B) Ensuring desirable activities by the borrower. C) Providing information periodically with respect to accounting and income reports. D) All of the above. Show Answer Correct Answer: D) All of the above. 6. Why is using coins as money easier than using gold bars? A) Coins are more uniform. B) Coins are more limited in supply. C) Coins are more portable. D) Coins are more durable. Show Answer Correct Answer: C) Coins are more portable. 7. If you have lost your card, you should ..... it to the bank. A) Tell. B) Inform. C) Report. D) Return. Show Answer Correct Answer: C) Report. 8. Money which has a lower metallic value than its face value like 5 cents, 10 cents, 20 cents and 50 cents is ..... A) Fiat money. B) Legal tender. C) Token money. D) Commodity money. Show Answer Correct Answer: C) Token money. 9. Financial institutions that accept deposits and make loans are called A) Exchanges. B) Banks. C) Over the counter Markets. D) None of the above. Show Answer Correct Answer: B) Banks. 10. What does CRR refer to in the banking system? A) Credit Rating Requirement. B) Cash Reserve Ratio. C) Currency Redemption Rate. D) Central Reserve Requirement. Show Answer Correct Answer: B) Cash Reserve Ratio. 11. What are the tools used by the RBI for credit control? A) Liquidity Adjustment Facility. B) Bank Rate. C) Interest Rate Swap. D) Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Repo Rate, Reverse Repo Rate, Open Market Operations (OMO). Show Answer Correct Answer: D) Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Repo Rate, Reverse Repo Rate, Open Market Operations (OMO). 12. Which of the following statements about the bank rate is true? A) Bank rate is different from interest rate. B) Bank rate is the discount rate provided by the central bank of a country. C) Bank rate is defined as the rate at which the central bank of a country gives credit to the commercial banks. D) All of the above. Show Answer Correct Answer: D) All of the above. 13. What is a function 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. 14. Reducing risk through the purchase of assets whose returns do not always move together is A) Intermediation. B) Discounting. C) Diversification. D) None of the above. Show Answer Correct Answer: C) Diversification. 15. What is the term for the ratio of a bank's reserves to its total deposits? A) Reserve requirement. B) Cash ratio. C) Statutory liquidity ratio. D) Deposit multiplier. Show Answer Correct Answer: A) Reserve requirement. 16. An essential function for banks is creating money by A) Storing all of the deposits. B) Loaning a portion of deposits. C) Loaning all of the deposits. D) None of the above. Show Answer Correct Answer: B) Loaning a portion of deposits. 17. Which type of money is used as a legal tender and recognized by law? A) Fiat money. B) Commodity money. C) Barter money. D) Crypto money. Show Answer Correct Answer: A) Fiat money. 18. The part of initial deposits to be kept with commercial banks as liquid A) CRR. B) SLR. C) Margin. D) Repo rate. Show Answer Correct Answer: B) SLR. 19. Debit card A) Allows customers to pay for purchases directly from their checking account. B) Movement of money electronically from one financial institution or account to another. C) Any organization that provides services related to money. D) Financial institution that accepts money from customers and deposits it into the customer's account. Show Answer Correct Answer: A) Allows customers to pay for purchases directly from their checking account. 20. Greenbacks and United States notes were issued to A) Raise money to finance the Civil War. B) Stabilize the monetary supply. C) Change the monetary standard. D) Pay interest on the federal debt. Show Answer Correct Answer: A) Raise money to finance the Civil War. 21. What is the primary factor that gives Fiat Money its value in a modern economy? A) Its convertibility into an equivalent amount of precious metal. B) The cost of the materials and labor required to print or mint it. C) The government's declaration that it is legal tender and public confidence in its acceptance. D) The international exchange rate set by the World Bank. Show Answer Correct Answer: C) The government's declaration that it is legal tender and public confidence in its acceptance. 22. The concept of global economy has come into existence due to A) Store of value. B) Transfer of value. C) Measure of value. D) None of these. Show Answer Correct Answer: B) Transfer of value. 23. What is the name of our nation's central bank? A) The Federal Reserve. B) The United States National Bank. C) The National Bank of the United States. D) Bank of America. Show Answer Correct Answer: A) The Federal Reserve. 24. Which of the following component of M1 measure of money supply? A) Post office savings by public. B) Time deposits in commercial banks. C) Demand deposits. D) All of these. Show Answer Correct Answer: C) Demand deposits. 25. Checks are not money because they A) Can bounce when there are not enough funds to cash them. B) Are just instruments to transfer money between banks. C) Are not always accepted when trying to purchase goods or services. D) Are not issued by the government. E) Are not guaranteed by banks. Show Answer Correct Answer: B) Are just instruments to transfer money between banks. ← 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