This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 37 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 37 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Who appoints representatives to serve on the Federal Reserve Board? A) US President. B) State governors. C) US Congress. D) Secretary of the Treasury. Show Answer Correct Answer: A) US President. 2. How do commercial banks help in the process of currency exchange? A) Commercial banks provide foreign exchange services to customers. B) Commercial banks offer free travel vouchers. C) Commercial banks provide car insurance services. D) Commercial banks sell discounted concert tickets. Show Answer Correct Answer: A) Commercial banks provide foreign exchange services to customers. 3. What is the meaning of the term 'liquidity preference'? A) The desire to hold money for transactions. B) The desire to hold money for investment. C) The desire to hold money for savings. D) The desire to hold money for speculation. Show Answer Correct Answer: A) The desire to hold money for transactions. 4. What does "legal tender" mean? A) Money that is widely accepted internationally. B) The official currency that must be accepted for payment in a country. C) Money made from precious metals. D) Money issued by commercial banks. Show Answer Correct Answer: B) The official currency that must be accepted for payment in a country. 5. Bank rate is for A) Commercial banks by the government. B) Commercial banks by Central Bank. C) Central banks by Central Bank. D) Central banks by commercial banks. Show Answer Correct Answer: B) Commercial banks by Central Bank. 6. Pagar al contado/ en efectivo A) To cash in check. B) To fill out a form. C) To pay in cash. D) To save. Show Answer Correct Answer: C) To pay in cash. 7. What is a check? A) A check is a form of digital currency. B) A check is a type of bank account. C) A check is a written order to a bank to pay money from an account. D) A check is a loan agreement between two parties. Show Answer Correct Answer: C) A check is a written order to a bank to pay money from an account. 8. Describe the role of commercial banks in providing payment services. A) Commercial banks provide a range of payment services including checking accounts, savings accounts, debit cards, credit cards, wire transfers, and online banking services. B) Commercial banks only provide investment services. C) Commercial banks only offer cash withdrawal services. D) Commercial banks are not involved in any payment services. Show Answer Correct Answer: A) Commercial banks provide a range of payment services including checking accounts, savings accounts, debit cards, credit cards, wire transfers, and online banking services. 9. The central bank can increase the availability of credit by: A) Raising repo rate. B) Raising reverse repo rate. C) Buying government securities. D) Selling government securities. Show Answer Correct Answer: C) Buying government securities. 10. Which of the following condition needed for financial institution become a bank A) Accepting deposit. B) Advancing loans. C) Both. D) None of these. Show Answer Correct Answer: C) Both. 11. All of the following should be considered when choosing a depository institution except A) Fees. B) Location of branches. C) Location of ATMs. D) Color of checks offered. Show Answer Correct Answer: D) Color of checks offered. 12. The ratio of a bank's total reserves to its total transactions deposits is known as the A) Reserve ratio. B) Required reserves. C) Excess reserves. D) Deposit ratio. Show Answer Correct Answer: A) Reserve ratio. 13. What does SLR stand for in the banking context? A) Security Lending Rate. B) Savings and Loans Regulation. C) Systematic Loan Requirement. D) Statutory Liquidity Ratio. Show Answer Correct Answer: D) Statutory Liquidity Ratio. 14. In the terminology of economics and money demand, the terms M3 and M4 are also known as: A) Short money. B) Long money. C) Broad money. D) Narrow money. Show Answer Correct Answer: C) Broad money. 15. A reserve ratio is the: A) Proportion of cash and security reserves the bank needs to hold. B) Fraction of deposits that the bank is required to hold. C) Loan to deposit ratio in the bank's balance sheet. D) Money belonging to the bank's largest depositors. Show Answer Correct Answer: B) Fraction of deposits that the bank is required to hold. 16. By supply of money we mean: A) Money deposited in bank. B) Money available with the public. C) Deposits with post office savings bank. D) All of these. Show Answer Correct Answer: D) All of these. 17. This bank operates in public interest without any profit motive. A) Reserve bank of India. B) State Bank of India. C) Canada Bank. D) Allahabad Bank. Show Answer Correct Answer: A) Reserve bank of India. 18. If an economy is to control recession like most of the Euro-zone nations, which of the following is appropriate A) Reducing repo rate. B) Reducing CRR. C) Both (a) and (b). D) None (a) and (b). Show Answer Correct Answer: C) Both (a) and (b). 19. What is NOT a characteristic of money? A) Divisible. B) Portable. C) Acceptable. D) Accessible. Show Answer Correct Answer: D) Accessible. 20. Of the following, which is the component of M2 money? A) Paper currency + coins + current deposit + fixed deposit. B) Paper currency + coins + current deposit. C) Paper currency + coins + saving deposit in commercial bank. D) Paper currency + coins + Tradable Deposit Certificates + treasury bills. Show Answer Correct Answer: D) Paper currency + coins + Tradable Deposit Certificates + treasury bills. 21. Which of the following motives of holding money depends on the level of interest rate? A) Precautionary motive only. B) Precautionary motive, transactions motive and speculative motive. C) Speculative motive and precautionary motive. D) Speculative motive only. Show Answer Correct Answer: D) Speculative motive only. 22. If the Fed increases the money supply, the economy will see A) A decrease in price level and an increase in real GDP. B) An decrease in price level and a decrease in real GDP. C) An increase in price level and a decrease in real GDP. D) An increase in price level and an increase in real GDP. Show Answer Correct Answer: D) An increase in price level and an increase in real GDP. 23. What is the currency in circulation? A) Deposits made by private individuals and the public sector. B) Total withdrawn and circulated in the economy by the Central Bank. C) All the above. D) None of the above. Show Answer Correct Answer: B) Total withdrawn and circulated in the economy by the Central Bank. 24. Why is it important to save? A) To use it for saving. B) To use it for an emergency. C) To use it for a party. D) To use it for credit cards. Show Answer Correct Answer: B) To use it for an emergency. 25. Name the credit control method which refers to difference between the amount of loan and market value of the security offered by the borrower against the loan. A) Moral Suasion. B) Margin Requirement. C) Legal Reserve Requirement. D) Direct Action. Show Answer Correct Answer: B) Margin Requirement. ← 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