This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 4 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The part of initial deposits to be kept with RBI is A) SLR. B) Margin. C) CRR. D) Reverse repo. Show Answer Correct Answer: C) CRR. 2. When checks have been written for more money than is in the account, it is called A) Overdraft. B) Cancelled payment. C) Stop payment. D) Reconciliation. Show Answer Correct Answer: A) Overdraft. 3. The RBI issues all currency in India except ..... A) Two thousand rupee note. B) One rupee note, coins. C) Five hundred rupee note. D) None of the above. Show Answer Correct Answer: B) One rupee note, coins. 4. What is the importance of savings accounts in banking? A) Savings accounts are essential for safe money storage, earning interest, promoting saving habits, and providing liquidity. B) Savings accounts are primarily for making large investments. C) Savings accounts are only for children to learn about money. D) Savings accounts are used to pay off debts immediately. Show Answer Correct Answer: A) Savings accounts are essential for safe money storage, earning interest, promoting saving habits, and providing liquidity. 5. Which the following option is the functions of central bank as a banker to the commercial bank? A) Managing the national debt. B) Policy maker (for monetary policy). C) Lender of the last resort. D) Control foreign exchange. Show Answer Correct Answer: B) Policy maker (for monetary policy). 6. Construction of school building is: A) Capital expenditure. B) Revenue receipts. C) Revenue expenditure. D) Capital receipts. Show Answer Correct Answer: A) Capital expenditure. 7. What are the main functions of banks? A) Store money, earn money, borrow money. B) Trade goods and services, measure costs, earn income. C) Invest money, save money, lend money. D) Buy money, sell money, charge interest. Show Answer Correct Answer: A) Store money, earn money, borrow money. 8. Discuss the function of money as a store of value. A) Money functions as a store of value by fluctuating in value unpredictably. B) Money functions as a store of value by depreciating in value over time. C) Money functions as a store of value by being easily counterfeited. D) Money functions as a store of value by maintaining its worth over time, enabling individuals to preserve wealth and purchasing power. Show Answer Correct Answer: D) Money functions as a store of value by maintaining its worth over time, enabling individuals to preserve wealth and purchasing power. 9. How inflation is controlled by RBI? A) By increasing the repo rate. B) By increasing legal reserve ratio. C) By increasing marginal requirement. D) All of these. Show Answer Correct Answer: D) All of these. 10. Divisibility means that money can be easily divided into A) Smaller units of value. B) Currency and coins. C) Representative money and fiat money. D) Different units of exchange. Show Answer Correct Answer: A) Smaller units of value. 11. Which monetary policy tool involves changing the reserve requirements? A) Interest rates. B) Open market operations. C) Discount rate. D) Reserve requirements. Show Answer Correct Answer: D) Reserve requirements. 12. Which of the following is not a source of income? A) Your annual salary for doing your job. B) Your monthly student loan payment. C) The stipend you receive for doing an internship. D) The wages you receive after a work shift. Show Answer Correct Answer: B) Your monthly student loan payment. 13. Which among following is correct about current account? A) No restriction on number of deposits or withdrawals. B) No interest on the deposit. C) Bank will collect service charges. D) All. Show Answer Correct Answer: D) All. 14. In an option contract for a bunch of shares Mr. A (buyer of shares) and Mr. B (seller of shares) agree to realize the contract on a future date. Mr. A purchases the right to exercise the option contract. Which option will this be called? A) Call option. B) Put option. C) Neither a Put and nor a Call option. D) Future contract. Show Answer Correct Answer: A) Call option. 15. The term "legal tender" serves which basic function? A) Medium of exchange. B) Standard of value. C) Store of value. D) Divisibility. Show Answer Correct Answer: A) Medium of exchange. 16. A means for comparing the values of goods and services A) Unit of account. B) Store of value. C) Liquidity. D) M1. Show Answer Correct Answer: A) Unit of account. 17. The headquarters of RBI is located at ..... A) Madras. B) New Delhi. C) Calcutta. D) Mumbai. Show Answer Correct Answer: D) Mumbai. 18. Who is most impacted by a rising rate of inflation? A) Renters in urban areas. B) Individuals with higher levels of savings. C) People with variable-rate mortgages. D) Retirees living on fixed incomes. Show Answer Correct Answer: D) Retirees living on fixed incomes. 19. What is the main role of central bank? A) Offer internet banking. B) Accepting deposit from consumers. C) Provide loan to consumers. D) Oversee and manage a country money supply. Show Answer Correct Answer: D) Oversee and manage a country money supply. 20. The main functions of financial institutions is to receive ..... and make ..... A) Loans, taxes. B) Taxes, loans. C) Loans, deposits. D) Deposits, loans. Show Answer Correct Answer: D) Deposits, loans. 21. A bank can only lend out it's A) Required reserves. B) Total checkable deposits. C) Excess reserves. D) Actual reserves. Show Answer Correct Answer: C) Excess reserves. 22. What is the primary purpose of a central bank's monetary policy? A) To keep inflation low and steady. B) To increase government spending. C) To manage foreign exchange rates. D) To provide loans to individuals. Show Answer Correct Answer: A) To keep inflation low and steady. 23. When was RBI set up? A) 1950. B) 1947. C) 1935. D) 1991. Show Answer Correct Answer: C) 1935. 24. What are the three main types of money? A) Banknotes, stocks, bonds. B) Digital currency, credit money, barter money. C) Commodity money, fiat money, representative money. D) Gold coins, silver coins, paper notes. Show Answer Correct Answer: C) Commodity money, fiat money, representative money. 25. Which of the following will increase the money supply? A) Fall in repo rate. B) Purchase of securities in open market. C) Decrease in cash reserve ratio. D) All of these. Show Answer Correct Answer: D) All of these. ← 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 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 10Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books