This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 31 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 31 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A machine that allows individuals to complete certain transactions from the machine without human assistance A) ATM. B) APR. C) LIG. D) LTD. Show Answer Correct Answer: A) ATM. 2. Which of the following is a feature of a certificate of deposit (CD)? A) Funds deposited in a CD are held for a certain length of time. B) Funds deposited in a CD have tiered interest rates. C) Funds deposited in a CD are very liquid. D) Funds deposited in a CD can be accessed via check or debit card. Show Answer Correct Answer: A) Funds deposited in a CD are held for a certain length of time. 3. Money or things which can be quickly and easily converted into money with little or no loss of purchasing power. A) Liquidity. B) Central Bank. C) Member Bank. D) Default. Show Answer Correct Answer: A) Liquidity. 4. What is the benefit of using a savings account? A) No benefits compared to a checking account. B) Higher risk of losing money. C) Earn interest and save for future expenses. D) Access to unlimited funds. Show Answer Correct Answer: C) Earn interest and save for future expenses. 5. What is the primary role of the Federal Reserve? A) To provide loans to the public. B) To keep the United States' economy healthy. C) To print and engrave coins and currency. D) To supervise the alien technology. Show Answer Correct Answer: B) To keep the United States' economy healthy. 6. Money multiplier is given by A) Desired reserve-excess reserve. B) 1/ desired reserve ratio. C) 1/assets. D) 1/liabilities. Show Answer Correct Answer: B) 1/ desired reserve ratio. 7. Any substance that serves as a medium of exchange, a measure of value, and a store of value A) Money. B) Medium of exchange. C) Measure of value. D) Fiat money. E) Specie. Show Answer Correct Answer: A) Money. 8. The difference between M1 and M2 is based on ..... A) Portability-the ease with which an asset can be moved. B) Divisibility-the ease with which an asset can be used to make smaller payments. C) Liquidity-the ease with which an asset can be converted into cash. D) Storability-how long an asset will retain its value. Show Answer Correct Answer: C) Liquidity-the ease with which an asset can be converted into cash. 9. RBI controls the money supply through a policy called ..... A) Trade policy. B) Fiscal policy. C) Monetary policy. D) Market policy. Show Answer Correct Answer: C) Monetary policy. 10. Typically, borrowers have superior information relative to lenders about the potential returns and risks associated with an investment project. The difference in information is called A) Moral Selection. B) Risk Sharing. C) Asymmetric information. D) None of the above. Show Answer Correct Answer: C) Asymmetric information. 11. Which of the following is the largest component of the money supply (M1) in Malaysia? A) Demand deposits. B) Notes and coints. C) Travelers cheque. D) Credit card. Show Answer Correct Answer: B) Notes and coints. 12. What will be the value initial deposits if total deposits created are 600cr and LRR 10%? A) 6000cr. B) 600cr. C) 100cr. D) 60cr. Show Answer Correct Answer: D) 60cr. 13. A plastic card that can be used at an ATM or at a point of sale "POS" that immediately takes money from your depository account A) ATM Card. B) Debit Card. C) Credit Card. D) Cash Card. Show Answer Correct Answer: B) Debit Card. 14. Credit card is money A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 15. Supply for money:There are several definitions of the supply of money ..... is narrowest and most commonly used. It includes all currency (notes and coins) in circulation, all checkable deposits held at banks (bank money), and all traveler's checks. A) M1. B) M2. C) M3. D) None of the above. Show Answer Correct Answer: A) M1. 16. The main purpose of the FDIC is to make sure that A) Commercial and investment banks do not fail. B) Customers do not lose money if a bank fails. C) Banks charge a fair amount of interest on loans. D) The government has enough gold to cover its expenses. Show Answer Correct Answer: B) Customers do not lose money if a bank fails. 17. What is the primary function of the Bank Rate in the economy? A) Lending money to commercial banks. B) Controlling the supply of money in the economy. C) Selling government securities. D) Providing loans to the government. Show Answer Correct Answer: B) Controlling the supply of money in the economy. 18. In the terminology of economics and money demand, the terms M1 and M2 are also known as: A) Short money. B) Long money. C) Broad money. D) Narrow money. Show Answer Correct Answer: D) Narrow money. 19. What is the role of a central bank as the "bankers' bank" ? A) It provides loans to households. B) It holds reserves for commercial banks and clears interbank payments. C) It prints money for the government. D) It issues credit cards. Show Answer Correct Answer: B) It holds reserves for commercial banks and clears interbank payments. 20. You can easily carry money in a pocket or a purse. This reflects what characteristic of money? A) Durability. B) Legal tender. C) Divisibility. D) Portability. Show Answer Correct Answer: D) Portability. 21. This function of Central Bank involves buying and selling of government securities from or to the public and commercial banks. A) Selective Credit Control. B) Legal Reserve Requirements. C) Open Market Operations. D) None of these. Show Answer Correct Answer: C) Open Market Operations. 22. Which of the following is the BEST example of commodity money? A) Precious stones. B) Promissory note. C) $ 10 bill. D) An IOU note. Show Answer Correct Answer: A) Precious stones. 23. Depository institution that invests the majority of its funds in home mortgages A) Federal Reserve System. B) Thrift institution. C) Mutual savings bank. D) Credit union. E) Savings and loan association. Show Answer Correct Answer: E) Savings and loan association. 24. The Federal Reserve System is A) Owned by the government. B) Unable to lend money to other banks. C) Publicly controlled. D) Under the authority of Congress. Show Answer Correct Answer: C) Publicly controlled. 25. T/F:Gold is universally accepted as a form of money. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. ← 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