This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 36 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 36 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If recession is to be combated: A) Bank rate needs to be lowered. B) CRR needs to be lowered. C) Both (a) and (b). D) Repo rate needs to be lowered and CRR needs to be raised. Show Answer Correct Answer: C) Both (a) and (b). 2. If production in that factory exceeds the target, the workers get a ..... A) Bonus. B) Donation. C) Gratuity. D) Premium. Show Answer Correct Answer: A) Bonus. 3. Rizal wants to buy a new car but doesn't have enough cash to pay for it upfront. He approaches a financial institution that provides loans for credit financing, allowing him to make installment payments for the vehicle. This institution is known as a: A) Insurance Company. B) Pension Fund Company. C) Leasing Company. D) Pawnshop. Show Answer Correct Answer: C) Leasing Company. 4. Which of the following is the function of a Central bank? A) Issue of notes. B) Banker to the Government and Banks. C) Supply and control of money. D) All of these. Show Answer Correct Answer: D) All of these. 5. The currency created by the central bank is called A) High powered money. B) Money. C) Bank money. D) Money supply. Show Answer Correct Answer: A) High powered money. 6. Objects that have value in themselves and are also used as money. A) Representative money. B) Commodity money. C) Simple money. D) Credit cards. Show Answer Correct Answer: B) Commodity money. 7. All of the following were problems with banking before the Civil War EXCEPT A) State banks issued their own currencies. B) Wildcat banks printed large amounts of currency. C) Many banks issued more currency than they could bank. D) The economy grew faster than the gold stock. Show Answer Correct Answer: D) The economy grew faster than the gold stock. 8. Something that keeps its value if it is stored rather than used A) Store of value. B) Representative money. C) Fiat money. D) Unit of account. Show Answer Correct Answer: A) Store of value. 9. If you want to save money for something special, you should: A) Spend it right away. B) Give it away. C) Hide it. D) Make a savings plan. Show Answer Correct Answer: D) Make a savings plan. 10. Kanye has $ 12, 000 in cash and he deposits it in Kardashian National Bank. How much does M1 change? A) $ 12, 000 x the monetary multiplier. B) $ 12, 000. C) It doesn't change, cash and checks are both M1. D) $ 12, 000 less the required reserves. Show Answer Correct Answer: C) It doesn't change, cash and checks are both M1. 11. The amount of money that is borrowed. A) Principal. B) Interest. C) Credit Card. D) Mortgage. Show Answer Correct Answer: A) Principal. 12. Exchange of one commodity or service for another A) Medium of Exchange. B) Barter. C) Money. D) Store of Value. Show Answer Correct Answer: B) Barter. 13. Characteristics of money:Stable- A) Must be valuable. B) It should be a reliable measure to last for a longer period of time. C) The value of currency should not change often. D) I.e. it can't easily be faked or copied. Show Answer Correct Answer: C) The value of currency should not change often. 14. Types of money:A good, the value of which is less than the value it represents as money. Dollar bills are an example of fiat money because their value as slips of printed paper is less than their value as money. A) Commodity money. B) Fiat money. C) All the above. D) None of the above. Show Answer Correct Answer: B) Fiat money. 15. Explain what a demand draft (DD) is. A) A demand draft (DD) is a bank-issued payment instrument that guarantees the payment of a specified amount to a beneficiary. B) A demand draft (DD) is a digital currency used for online transactions. C) A demand draft (DD) is a type of credit card. D) A demand draft (DD) is a loan provided by the bank. Show Answer Correct Answer: A) A demand draft (DD) is a bank-issued payment instrument that guarantees the payment of a specified amount to a beneficiary. 16. Diversification lowers your risk? A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 17. M1 and M2 are known as ..... A) Supply of money. B) Broad money. C) Narrow money. D) Demand for money. Show Answer Correct Answer: C) Narrow money. 18. What do you mean by credit creation by commercial banks A) Process of creation of foreign exchange. B) Process of loan creation. C) Process of total withdrawal creation. D) Process of total deposit creation. Show Answer Correct Answer: D) Process of total deposit creation. 19. Characteristics of money:Hard to counterfeit- A) Must be valuable. B) It should be a reliable measure to last for a longer period of time. C) The value of currency should not change often. D) I.e. it can't easily be faked or copied. Show Answer Correct Answer: D) I.e. it can't easily be faked or copied. 20. Which of the following best describes deflation? A) A decrease in the cost of goods and services. B) An increase in the cost of goods and service. C) A decrease in purchases of a good or service. D) An increase in purchases of a good or service. Show Answer Correct Answer: A) A decrease in the cost of goods and services. 21. This type of card allows you to withdraw money directly out of your checking account to pay for things ..... A) Credit Card. B) Debit Card. C) Gift Card. D) E-Card. Show Answer Correct Answer: B) Debit Card. 22. The commercial bank keeps part of their money in central bank. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 23. Central bank provides the same banking service to the government as commercial banks provide to people.Which is this function of Central bank? A) Controller of credit. B) Banker's to governement. C) Bank of issue. D) Lenders of last resort. Show Answer Correct Answer: B) Banker's to governement. 24. Money serves as a ..... , something that holds its value over time. A) Store of value. B) Medium of exchange. C) All the above. D) None of the above. Show Answer Correct Answer: A) Store of value. 25. Describe the process of buying and selling stocks on the stock exchange. A) The process involves sending cash directly to the company for shares. B) The process includes opening a brokerage account, researching stocks, placing orders, monitoring prices, and executing trades. C) Placing orders is not necessary when trading stocks. D) Stocks can be bought and sold without the need for a brokerage account. Show Answer Correct Answer: B) The process includes opening a brokerage account, researching stocks, placing orders, monitoring prices, and executing trades. ← 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