This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 28 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 28 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How does the Statutory Liquidity Ratio (SLR) impact the banking sector? A) Regulating the margin requirement. B) Controlling credit creation. C) Setting credit quotas for different activities. D) Managing foreign exchange reserves. Show Answer Correct Answer: B) Controlling credit creation. 2. Does location affect your choice of depository institution? A) No. B) Yes. C) All the above. D) None of the above. Show Answer Correct Answer: B) Yes. 3. Which characteristic of money is crucial for it to last awhile in circulation? A) Durability. B) Divisibility. C) Portability. D) Uniformity. Show Answer Correct Answer: A) Durability. 4. What happens to a stock owner if the stock price increases? A) They borrow money. B) They lose money. C) They earn interest. D) They make money. Show Answer Correct Answer: D) They make money. 5. The possibility of losing some or all of a particiular investment. A) Risk. B) Index. C) Industry. D) Profit. Show Answer Correct Answer: A) Risk. 6. The washerman barbers neeti kavaikaru were paid in ..... for their work in villages in earlier days A) Money. B) Food grains. C) Gift. D) All. Show Answer Correct Answer: B) Food grains. 7. What is the primary purpose of the Federal Reserve's open market operations? A) To regulate the stock market. B) To set tax rates. C) To control the money supply. D) To issue currency. Show Answer Correct Answer: C) To control the money supply. 8. Means through which goods and services can be exchanged A) Medium of exchange. B) Store of value. C) All the above. D) None of the above. Show Answer Correct Answer: A) Medium of exchange. 9. Why are the interest rates not the same for borrowing and lending? A) Banks charge a higher interest rate for loans than they pay for savings accounts. B) Banks charge a lower interest rate for loans than they pay for savings accounts. C) Banks charge the same interest rate for loans and savings accounts. D) Banks do not charge interest for loans or savings accounts. Show Answer Correct Answer: A) Banks charge a higher interest rate for loans than they pay for savings accounts. 10. Holding the stock of rice requires a lot of spaceWhich Problem of barter system expressed here? A) Unit of Account. B) Medium of Exchange. C) Store of value. D) Deferred payment. Show Answer Correct Answer: C) Store of value. 11. The required percentage of deposits to be kept as cash with the bank is called: A) SLR. B) CRR. C) Monetary base. D) Money multiplier. Show Answer Correct Answer: B) CRR. 12. Percentage of the total amount of money loaned or borrowed A) Interest rate. B) Assets. C) All the above. D) None of the above. Show Answer Correct Answer: A) Interest rate. 13. The rate at which central bank lends to commercial banks is called? A) SLR. B) CRR. C) Bank rate. D) None of the above. Show Answer Correct Answer: C) Bank rate. 14. What are the risks associated with investing in the stock market? A) Inflation, unemployment, technological advancements. B) Interest rates, political instability, currency fluctuations. C) Market volatility, potential for loss of principal, lack of diversification, economic downturns. D) Regulatory changes, climate change, demographic shifts. Show Answer Correct Answer: C) Market volatility, potential for loss of principal, lack of diversification, economic downturns. 15. Which of the following is a quantitative method of credit control? A) Moral Suasion. B) Credit Rationing. C) Open Market Operations. D) Margin Requirements. Show Answer Correct Answer: C) Open Market Operations. 16. Identify the correct option of the components of the money supply. A) Currency + demand deposits. B) Currency + demand deposits + other deposits. C) All the above. D) None of the above. Show Answer Correct Answer: A) Currency + demand deposits. 17. What helps us carry coins? A) Box. B) Wallet. C) Bag. D) Cup. Show Answer Correct Answer: B) Wallet. 18. What is another word for money? A) Cash. B) Tree. C) Book. D) Chair. Show Answer Correct Answer: A) Cash. 19. Which of the following services provided by banks involves transferring money electronically between accounts? A) Pension services. B) Electronic funds transfer. C) Financial advice. D) Bank loans. Show Answer Correct Answer: B) Electronic funds transfer. 20. What is inflation? A) Inflation is the increase in prices and fall in the purchasing value of money. B) Inflation is the process of reducing the money supply to stabilize prices. C) Inflation refers to the total amount of money in circulation without any price changes. D) Inflation is the decrease in prices and increase in the purchasing value of money. Show Answer Correct Answer: A) Inflation is the increase in prices and fall in the purchasing value of money. 21. Money is something that is A) Accepted by banks. B) Locally accepted. C) Regionally accepted. D) Universally accepted. Show Answer Correct Answer: D) Universally accepted. 22. This practice of retaining only a portion of deposits on hand and lending out the rest is called A) A bank run. B) Fractional reserve banking. C) Demand deposits. D) Bartering. Show Answer Correct Answer: B) Fractional reserve banking. 23. Which of the following is a secondary function of money? A) Measure of Value. B) Medium of Exchange. C) Standard of Deferred Payments. D) Store of Value. Show Answer Correct Answer: D) Store of Value. 24. If George keeps a part of his earnings as cash in a safety deposit box, he is employing money as a ..... A) Store of value. B) Measure of value. C) Medium of exchange. D) None is correct. Show Answer Correct Answer: A) Store of value. 25. Which of the statements gives a true picture of the effect of the central bank selling securities in the market? A) The credit creation capacity of commercial banks will fall. B) The credit creation capacity of commercial banks will rise. C) The credit creation capacity of commercial banks may rise or fall. D) There is no effect on the credit creation capacity of commercial banks. Show Answer Correct Answer: A) The credit creation capacity of commercial banks will fall. ← 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