This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 38 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 38 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is NOT the function of central bank? A) Management of national debt. B) Issuing traveller's cheque. C) Control statutory reserve. D) Store intentional reserve. Show Answer Correct Answer: B) Issuing traveller's cheque. 2. What tool does a central bank use to influence interest rates? A) Open market operations. B) Currency interventions. C) Reserve requirements. D) Interest rate swaps. Show Answer Correct Answer: A) Open market operations. 3. Which of the following may increase money supply in an economy? A) An increase in reserve requirement. B) A decrease in the discount rate. C) An increase in the discount rate. D) Bank Negara Malaysia selling government securities in the open market. Show Answer Correct Answer: B) A decrease in the discount rate. 4. What has the monopoly of note issue in every country? A) Commercial Banks. B) Central banks. C) All the above. D) None of the above. Show Answer Correct Answer: B) Central banks. 5. Other name for legal reserve requirement is ..... A) Cash reserve ratio. B) Statutory liquidity ratio. C) Variables reserve ratio. D) Bank rate. Show Answer Correct Answer: C) Variables reserve ratio. 6. Why are college loans considered investments? A) Because they provide immediate financial returns. B) Because they result in getting more education usually means you'll qualify for higher-paying jobs. C) Because they are interest-free. D) Because they can be paid off quickly. Show Answer Correct Answer: B) Because they result in getting more education usually means you'll qualify for higher-paying jobs. 7. What is the significance of the Cash Reserve Ratio (CRR) in the banking system? A) Regulating the repo rate. B) Controlling credit creation. C) Setting credit quotas for different sectors. D) Increasing liquidity in the economy. Show Answer Correct Answer: B) Controlling credit creation. 8. Money is expected to have value and be used by all to make purchases. A) Acceptability. B) Uniformity. C) Durability. D) Divisibility. Show Answer Correct Answer: A) Acceptability. 9. Repo rate is the rate at which: A) Commercial Banks purchase government securities from the Central Bank. B) Commercial Banks can take loans from the Central Bank. C) Commercial Banks can keep their deposits with the central bank. D) Short-term loans are given by commercial banks. Show Answer Correct Answer: B) Commercial Banks can take loans from the Central Bank. 10. In the Money Market graph, the A) Demand for money is perfectly elastic. B) Supply of money is perfectly inelastic. C) The price axis is labeled real interest rate. D) The supply curve is leaning. Show Answer Correct Answer: B) Supply of money is perfectly inelastic. 11. What is the stock market? A) A type of farmers market where people buy and sell food. B) A place where parts of businesses are bought and sold. C) A special type of grocery store that sells stocks. D) A type of bank that gives out loans to new businesses. Show Answer Correct Answer: B) A place where parts of businesses are bought and sold. 12. What is the bank rate managed by the Bank of Canada? A) The interest rate at which Canadian citizens can borrow money. B) The rate at which chartered banks can borrow from the Bank of Canada. C) The rate at which businesses can borrow from private banks. D) The rate at which the government lends money to other countries. Show Answer Correct Answer: B) The rate at which chartered banks can borrow from the Bank of Canada. 13. Which of the following serves as the national currency that we use in this country today? A) Specie. B) Goldsmith note. C) Federal reserve note. D) Euro. Show Answer Correct Answer: C) Federal reserve note. 14. 1/required reserve ratio determines the A) Required reserves. B) Excess reserves. C) Lending capacity. D) Money multiplier. Show Answer Correct Answer: D) Money multiplier. 15. When Mr. Moore gets his paycheck, he knows he doesn't have to spend it all at once because money is A) Standard of Value. B) Medium of Exchange. C) Store of Value. D) Representative money. Show Answer Correct Answer: C) Store of Value. 16. Who is author of the ancient book on economics, Arthashastra? A) Sushrut. B) Chanakya. C) Megasthenes. D) Amartya Sen. Show Answer Correct Answer: B) Chanakya. 17. Commercial bank can control the supply of money by printing money. A) False. B) True. C) All the above. D) None of the above. Show Answer Correct Answer: A) False. 18. Amelia receives a card from her financial institution that allows to her use an ATM for depositing and withdrawing money, checking her account information, and more. Amelia has a what? A) ATM Card. B) Savings Account. C) Debit Card. D) Cash Card. E) Credit Card. Show Answer Correct Answer: A) ATM Card. 19. Money supply refers to A) Total volume of money held by public at a particular point of time. B) Total volume of money held by public over a period of time. C) Total volume of money held by the government. D) Both a and b. Show Answer Correct Answer: A) Total volume of money held by public at a particular point of time. 20. The lower your skill level, the higher your wage? A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 21. What is a potential consequence of having a bad credit history? A) Easier access to loans. B) Lower interest rates on future loans. C) Difficulty in getting any credit at all. D) Increased credit limits. Show Answer Correct Answer: C) Difficulty in getting any credit at all. 22. How is income earned and what are the different sources of income? A) Income is earned through winning the lottery and gambling. B) Income is earned through various sources such as employment, investments, business profits, rental income, and government assistance. C) Income is earned through begging and panhandling. D) Income is earned through stealing and illegal activities. Show Answer Correct Answer: B) Income is earned through various sources such as employment, investments, business profits, rental income, and government assistance. 23. Treasury note A) Security that pays interest over terms ranging from two to ten years. B) Security that matures in a year or less. C) Money is used in exchange for goods and services needed by individuals, businesses, and governments. D) Money is a common measure of what something is worth or price of a good or service. Show Answer Correct Answer: A) Security that pays interest over terms ranging from two to ten years. 24. To increase money supply, RBI should A) Increase Margin Requirements. B) Reduce Margin Requirements. C) Increase SLR. D) None of the above. Show Answer Correct Answer: B) Reduce Margin Requirements. 25. What agencies insure banks and credit unions? A) IRS and DHS. B) DHS and FDIC. C) FDIC and NCUA. D) NCUA and FICA. Show Answer Correct Answer: C) FDIC and NCUA. ← 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