This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 41 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 41 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is a financial option contract? A) It is a financial contract where agreement has to be compulsorily carried on the expiry date. B) It is a financial contract where both the parties have to deposit the margin money. C) It is a financial contract where the option seller has right to exercise or not to exercise contract. D) It is a financial contract where the option buyer has right to exercise or not to exercise contract. Show Answer Correct Answer: D) It is a financial contract where the option buyer has right to exercise or not to exercise contract. 2. Reszta A) Change. B) Bill. C) Exchange. D) Payment. Show Answer Correct Answer: A) Change. 3. Why would a company need to issue stock? A) To increase its' customer base. B) To raise money. C) To stop the government from regulating it. D) To show customers that it's successful. Show Answer Correct Answer: B) To raise money. 4. Which of the following is a type of banking service that allows your principal to grow through the adding in of interest? A) Basic checking account. B) Savings account. C) Charge account. D) Credit account. Show Answer Correct Answer: B) Savings account. 5. During inflation bank rate will A) Reduce bank rate. B) Increase bank rate. C) No change. D) None of the above. Show Answer Correct Answer: B) Increase bank rate. 6. The National Banking System was created in ..... to standardize currency and banking practices in the U.S. A) 1861. B) 1863. C) 1900. D) 1933. Show Answer Correct Answer: B) 1863. 7. Working in which is better: A) A secure job with a good size of firm but medium pay. B) A secure job with more pay but a small size of firm. C) A not secure job with the most pay but smallest size of firm. D) None of the above. Show Answer Correct Answer: A) A secure job with a good size of firm but medium pay. 8. How much of a person's deposit are banks required to keep on reserve? A) 10%. B) 20%. C) $ 100, 000. D) 5%. Show Answer Correct Answer: B) 20%. 9. Store of value A) When money can be saved and used at a later date. B) Mechanism a nation uses to provide and manage money for itself. C) Process of transferring money from one individual or organization to another. D) Plastic card that allows the holder to make credit purchases up to an authorized amount. Show Answer Correct Answer: A) When money can be saved and used at a later date. 10. What is the relationship between interest rates and demand for money? A) As interest rates decrease, demand for money increases. B) As interest rates increase, demand for money increases. C) Interest rates are determined by demand for money. D) Interest rates and demand for money are unrelated. Show Answer Correct Answer: A) As interest rates decrease, demand for money increases. 11. Before the idea of money, goods and services were traded for one another. This was known as ..... A) Barter. B) Exchange. C) Redeem. D) Offload. Show Answer Correct Answer: A) Barter. 12. What was the primary inherent limitation of the Barter System that directly led to the need for a medium of exchange like money? A) The difficulty in valuing services compared to goods. B) Lack of double coincidence of wants. C) The non-durability of goods exchanged. D) The absence of a common Unit of Account. Show Answer Correct Answer: B) Lack of double coincidence of wants. 13. The coins and paper bills used as money in a society A) Prices. B) Currency. C) Bond. D) Checks. Show Answer Correct Answer: B) Currency. 14. What is the role of a central bank in an economy? A) To control the production of goods and services. B) The role of a central bank in an economy is to manage monetary policy, regulate banks, and ensure financial stability. C) To set tax rates for individuals and businesses. D) To manage international trade agreements. Show Answer Correct Answer: B) The role of a central bank in an economy is to manage monetary policy, regulate banks, and ensure financial stability. 15. Expenses that can or go up or down each month A) Merry-go-round Expenses. B) Fixed Expenses. C) Shifty Expenses. D) Variable Expenses. Show Answer Correct Answer: D) Variable Expenses. 16. Which statement is TRUE about the demand for money curve for transaction motive and precautionary motive? A) Perfectly inelastic on the level of income. B) Perfectly elastics against level of income. C) Perfectly inelastic against interest rate. D) Perfectly elastic against interest rate. Show Answer Correct Answer: C) Perfectly inelastic against interest rate. 17. The process of money creation or credit creation is done by A) Commercial banks. B) Central bank. C) World bank. D) Rural bank. Show Answer Correct Answer: A) Commercial banks. 18. What is the role of the Federal Reserve in the banking system? A) It sets the interest rates for loans and savings accounts. B) It regulates the banking industry and ensures the stability of the financial system. C) It prints and distributes money. D) All of the above. Show Answer Correct Answer: B) It regulates the banking industry and ensures the stability of the financial system. 19. What do we call the person who helps us at the bank? A) Doctor. B) Teacher. C) Teller. D) Chef. Show Answer Correct Answer: C) Teller. 20. Why is it important to understand interest when managing money? A) Interest has no impact on financial decisions. B) Understanding interest only matters for large sums of money. C) It is important to understand interest when managing money because it affects how much you earn or owe on loans, savings, and investments. D) Interest rates are always fixed and never change. Show Answer Correct Answer: C) It is important to understand interest when managing money because it affects how much you earn or owe on loans, savings, and investments. 21. The main job of Bank Negara Malaysia is to ..... A) Control of the rate of growth of the money supply. B) Manage the national debt and foreign exchange. C) Provide low-interest loans to all financial institutions. D) Print paper currency. Show Answer Correct Answer: A) Control of the rate of growth of the money supply. 22. During deflation central bank will A) Sell government securities. B) Buy government securities. C) No buy or sell. D) None of the above. Show Answer Correct Answer: B) Buy government securities. 23. Which of the following agency is responsible for issuing Rs 1 currency note in India? A) RBI. B) Ministry of commerce. C) Ministry of finance. D) Niti aayog. Show Answer Correct Answer: C) Ministry of finance. 24. High powered money includes A) Currency and demand deposits. B) Demand deposits and saving deposits. C) Currency held by the public and the cash reserves with banks. D) None of these. Show Answer Correct Answer: C) Currency held by the public and the cash reserves with banks. 25. What items are not included in M1 measure of supply A) Currency and coins with public. B) Inter banks deposits. C) Net time deposits with banks. D) Net time deposits with bank. Show Answer Correct Answer: B) Inter banks deposits. ← 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