This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 32 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 32 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The privately owned, publicly controlled central bank of the U.S A) Federal Reserve System. B) Bank of the United States. C) FDIC. D) State bank. Show Answer Correct Answer: A) Federal Reserve System. 2. An essential function for a bank is to A) Maximize its assets. B) Create money through lending. C) Lend all of its deposits. D) Minimize its reserve ratio. Show Answer Correct Answer: B) Create money through lending. 3. What happens when you make a purchase using a credit card? A) The credit card issuer pays the store. B) The place where you made the purchase receives the money within 24 hours. C) The amount of the purchase is deducted from a prepaid account. D) The money is immediately deducted from your account. Show Answer Correct Answer: A) The credit card issuer pays the store. 4. System that functions as the central bank of the United States A) Federal Reserve System. B) Thrift institution. C) Mutual savings bank. D) Credit union. E) Savings and loan association. Show Answer Correct Answer: A) Federal Reserve System. 5. ..... is money that is deemed legal tender by the government, and it is not based on or convertible into a commodity. A) Money supply. B) Liquidity. C) Fiat money. D) Commodity money. Show Answer Correct Answer: C) Fiat money. 6. High powered money is equal to A) Money supplied by the RBI only. B) Total supply of money in the economy. C) Notes and coins held by the people. D) Money held by the people, vault cash with the commercial bank as well as cash reserves with the commercial bank. Show Answer Correct Answer: D) Money held by the people, vault cash with the commercial bank as well as cash reserves with the commercial bank. 7. Which of the following agency is responsible for issuing rs. 1currency note in India A) Reserve Bank of India. B) Ministry of Commerce. C) Ministry of Finance. D) Niti Aayog. Show Answer Correct Answer: C) Ministry of Finance. 8. A(n) ..... is a bank that belongs to the Federal Reserve System. A) Member bank. B) Credit union. C) Savings and loan. D) Greenbacks. Show Answer Correct Answer: A) Member bank. 9. The creation of ..... is called credit creation A) Secondary deposits. B) Time deposits. C) Primary deposits. D) None of these. Show Answer Correct Answer: A) Secondary deposits. 10. What happens to the credit creation capacity of banks when the Legal Reserve Ratio (LRR) is increased? A) It becomes unpredictable. B) It increases. C) It decreases. D) It remains the same. Show Answer Correct Answer: C) It decreases. 11. Transfer of value has become easier with A) Evolution of money. B) Storage of money. C) Measure of value. D) All of these. Show Answer Correct Answer: A) Evolution of money. 12. Money overcomes the problem of barter system A) Never. B) Possible. C) Yes. D) Seldom. Show Answer Correct Answer: D) Seldom. 13. If on receiving a $ 300 deposit, the banks excess reserves increase by $ 255, the current reserve requirement must be: A) 15%. B) 10%. C) 5%. D) 12%. Show Answer Correct Answer: A) 15%. 14. What is the primary method the Federal Reserve uses to control inflation according to monetary policy? A) Adjusting government spending. B) Modifying tax rates. C) Implementing interest rate changes. D) Regulating stock market. Show Answer Correct Answer: C) Implementing interest rate changes. 15. Regressive taxes ..... A) Are higher the more you make. B) Are lower the more you make. C) Are the same for everyone. D) None of the above. Show Answer Correct Answer: B) Are lower the more you make. 16. What should you do before spending money? A) Run around. B) Take a nap. C) Count it. D) Throw it. Show Answer Correct Answer: C) Count it. 17. Which one is the Bank of the Public? A) Commercial Bank. B) Central Bank. C) Both (a) and (b). D) None of the above. Show Answer Correct Answer: A) Commercial Bank. 18. What was created by President Abraham Lincoln to combat counterfeiting? A) Secret Service. B) Federal Reserve System. C) Bureau of Engraving and Printing. D) Mutilated Currency Division. Show Answer Correct Answer: A) Secret Service. 19. Bank rate is A) Commercial banks by the government. B) Rural bank by commercial bank. C) Commercial Bank by the central bank. D) Central bank by world bank. Show Answer Correct Answer: C) Commercial Bank by the central bank. 20. In inflationary gap can be corrected by: A) Increasing government spending. B) Decreasing taxes. C) Increasing taxes. D) Increasing subsidies on exports. Show Answer Correct Answer: C) Increasing taxes. 21. Institution that accepts deposits for lending purpose is known as ..... A) Commercial Bank. B) Central Bank. C) Government. D) Public. Show Answer Correct Answer: A) Commercial Bank. 22. What is fiat money? A) A government issued currency. B) Bit coins. C) Cheques. D) Gold. Show Answer Correct Answer: A) A government issued currency. 23. Which of the following is a characteristic of money? A) Inadequacy. B) Divisibility. C) Lack of security. D) Lack of tough. Show Answer Correct Answer: B) Divisibility. 24. When people say money is used as a 'unit of account', what do they mean? A) It can be traded and exchanged easily, and split into different amounts easily. B) It's a way of comparing the relative value of different things. C) It can be saved and used at some point in the future. D) None of the above. Show Answer Correct Answer: B) It's a way of comparing the relative value of different things. 25. Money or other items generally accepted as payment for goods and services. A) Measure of value. B) Medium of exchange. C) Scarcity. D) Store of Value. Show Answer Correct Answer: B) Medium of exchange. ← 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