This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 43 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 43 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Electronic funds transfer EFT A) Allows customers to pay for purchases directly from their checking account. B) Movement of money electronically from one financial institution or account to another. C) Any organization that provides services related to money. D) Financial institution that accepts money from customers and deposits it into the customer's account. Show Answer Correct Answer: B) Movement of money electronically from one financial institution or account to another. 2. What are common options for saving money? A) Savings accounts, certificates of deposit (CDs), stocks. B) Interest rate, assets, income. C) Barter, trade, investment. D) Inflation, stocks, borrowing. Show Answer Correct Answer: A) Savings accounts, certificates of deposit (CDs), stocks. 3. Accepting deposits from individuals and firms and providing loans to the public are the basic function of ..... A) Central bank. B) Merchant bank. C) Commercial bank. D) Insurance Companies. Show Answer Correct Answer: C) Commercial bank. 4. Mortimer transfers $ 100 from his savings account to his checking account. The effect on the money supply will be A) M1 increases, M2 decreases, M3 is unchanged. B) M1, M2, M3 all increase. C) M1 will increase, M2 and M3 are unchanged. D) M1 will increase, M2 will increase, M3 falls. Show Answer Correct Answer: C) M1 will increase, M2 and M3 are unchanged. 5. Transaction in a commercial bank is govern by the central bank. A) False. B) True. C) All the above. D) None of the above. Show Answer Correct Answer: B) True. 6. What's the first thing you should do before buying something? A) Ask friends. B) Check the price. C) Close your eyes. D) Pick a color. Show Answer Correct Answer: B) Check the price. 7. Which of these is not a function of money A) Medium of exchange. B) Store of value. C) Means of deferred payment. D) Perishability. Show Answer Correct Answer: D) Perishability. 8. Which of the following is money in the form of gold or silver coins? A) Fiat money. B) Commodity money. C) Specie money. D) Bitcoin. Show Answer Correct Answer: C) Specie money. 9. How does selective credit control function in India? A) It increases interest rates across all sectors uniformly. B) Selective credit control functions by regulating credit flow to specific sectors through measures like credit ceilings and margin requirements. C) It only applies to foreign investments in India. D) It eliminates credit for all sectors without exception. Show Answer Correct Answer: B) Selective credit control functions by regulating credit flow to specific sectors through measures like credit ceilings and margin requirements. 10. What is true about the Central Bank? A) The Central Bank is the banker to banks, government, and financial institutions. B) Central Bank is the banker to the citizens. C) The Central Bank operates to make a profit for its owners. D) The Central Bank deal with the general public. Show Answer Correct Answer: A) The Central Bank is the banker to banks, government, and financial institutions. 11. If you have 2 meters cloth and you want wheat against it then how much wheat you should get . Which drawback of barter exchange is highlighted A) Lack of medium of exchange. B) Lack of store of value. C) Lack of measure of value. D) None of these. Show Answer Correct Answer: C) Lack of measure of value. 12. Demand for money depends positively on: A) Income. B) Interest rate. C) Price of gold. D) Inflation rate. Show Answer Correct Answer: A) Income. 13. Saving and loan institution A) Money placed into an account. B) Nonprofit financial institution that is privately owned and provides banking services for its members. C) Financial institution that offers savings and loan services. D) Financial institution that does not accept deposits. Show Answer Correct Answer: C) Financial institution that offers savings and loan services. 14. Poland ..... (handluje) with western countries. A) Makes money. B) Invests. C) Trades. D) Sells. Show Answer Correct Answer: C) Trades. 15. Open market operations as an instrument of credit control are performed by: A) The central bank of the country. B) The commercial bank of the country. C) Both (a) and (b). D) None of these. Show Answer Correct Answer: A) The central bank of the country. 16. To act as money, an item should be homogeneous and recognizable. Which characteristics of money does this describe? A) Uniformity. B) Acceptability. C) Scarcity. D) Durability. Show Answer Correct Answer: A) Uniformity. 17. What is the defect of the barter system? A) Lack of double coincidence of wants. B) Difficulty in the measurement of value. C) Difficulty in store of value. D) All of these. Show Answer Correct Answer: D) All of these. 18. Created during the Civil War, the National Banking System A) Was made up of banks chartered by the federal government. B) Resulted in shifting the paper money supply from being entirely privately-issued to being entirely publicly-issued. C) Eventually replaced state-chartered banks. D) All of these. Show Answer Correct Answer: D) All of these. 19. Which one is included in the primary function of money? A) Medium of Exchange. B) Measure of Value. C) Both of the above. D) Store of value. Show Answer Correct Answer: C) Both of the above. 20. How could the Federal Reserve encourage banks to lend out more of their reserves? A) Reduce the discount rate. B) Raise the required amount of reserve. C) Increase the prime rate. D) Reduce the money supply. Show Answer Correct Answer: A) Reduce the discount rate. 21. Money affects well-being A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 22. Asymmetric information is a situation where A) One party in a transaction has more information that the other party. B) People take risks becuase of lack of information. C) Borrowers behave diferently from lenders. D) People do not gather information properly. Show Answer Correct Answer: A) One party in a transaction has more information that the other party. 23. A system that requires banks to hold reserves equal to some fraction (%) of their checkable deposits. A) Expansionary Effect on Economy of a Bank Deposit. B) Fractional Reserve Banking System. C) Bank Failures. D) Money Multiplier. Show Answer Correct Answer: B) Fractional Reserve Banking System. 24. Paper currency issued by the Treasury that was redeemable in both gold and silver A) Monetary standard. B) Legal tender. C) Tresury coin notes. D) Gold standard. E) Inconvertible fiat money standard. Show Answer Correct Answer: C) Tresury coin notes. 25. Demand for Money:People often demand money as a precaution against an uncertain future. Unexpected expenses, such as medical or car repair bills, often require immediate payment. The need to have money available in such situations is referred to as the ..... for demanding money. A) Transactions Motive. B) Precautionary Motive. C) Speculative Motive. D) None of the above. Show Answer Correct Answer: B) Precautionary Motive. ← 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