This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 48 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 48 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. If the desired reserve ratio is 2%, then the money multiplier is A) 50. B) 5. C) 500. D) None of the above. Show Answer Correct Answer: A) 50. 2. Which would somebody use to withdraw money from a checking account? A) Store-value card. B) Debit card. C) Credit card. D) Gift card. Show Answer Correct Answer: B) Debit card. 3. Monetary system 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: B) Mechanism a nation uses to provide and manage money for itself. 4. How do electronic banking services work? A) They require physical visits to the bank for all transactions. B) Electronic banking services enable online access to bank accounts for transactions and account management. C) They are exclusively for business accounts and not personal accounts. D) They only allow cash withdrawals from ATMs. Show Answer Correct Answer: B) Electronic banking services enable online access to bank accounts for transactions and account management. 5. One role monetary policy is to control ..... by changing the ..... A) Inflation ; price level. B) Unemployment; level of taxation. C) The price level; government spending. D) Inflation; quantity of money in circulation. Show Answer Correct Answer: D) Inflation; quantity of money in circulation. 6. Shahs A) Madras. B) Bengal. C) Patna. D) Surat. Show Answer Correct Answer: C) Patna. 7. Banco A) Bank. B) Money. C) Check. D) Cash. Show Answer Correct Answer: A) Bank. 8. In India, who is responsible for issuing currency notes? A) Government of India. B) State Bank of India. C) Reserve Bank of India. D) Ministry of Finance. Show Answer Correct Answer: C) Reserve Bank of India. 9. How much money is a quarter worth? A) 10 cents. B) 5 cents. C) 1 dollar. D) 25 cents. Show Answer Correct Answer: D) 25 cents. 10. The fee charged by a financial institution when you borrow money A) Deposit. B) Withdraw. C) Interest. D) Loan. Show Answer Correct Answer: C) Interest. 11. A key difference between commercial banks and credit unions is that A) Commercial banks are 'for-profit' and credit unions are 'not-for-profit'. B) Commercial banks typically pay higher interest rates than credit unions. C) Credit unions are more commonly located in rural areas while commercial banks are more commonly located in urban areas. D) Commercial banks offer more services, such as debit cards and online banking, than credit unions. Show Answer Correct Answer: A) Commercial banks are 'for-profit' and credit unions are 'not-for-profit'. 12. In a one-person economy, money has: A) Maximum use. B) No role. C) Limited role. D) Role only in savings. Show Answer Correct Answer: B) No role. 13. An institution for receiving, keeping and lending money A) Bank. B) Bond. C) Stock. D) Company. Show Answer Correct Answer: A) Bank. 14. Which of the following is not a quantitative instrument of credit control? A) Varying legal reserves. B) Margin Requirements. C) Open Market Operations. D) Bank Rate Policy. Show Answer Correct Answer: B) Margin Requirements. 15. In the principal-agent problem A) The managers are agents and stockholders are principals. B) The managers are principals and stockholders are agents. C) Managers and stockholders work for each other's interest. D) Stockholders incentivize managers to work harder. Show Answer Correct Answer: A) The managers are agents and stockholders are principals. 16. What is the role of the Federal Reserve in the U.S. banking system? A) The Federal Reserve oversees monetary policy, regulates banks, maintains financial stability, and provides financial services. B) The Federal Reserve sets interest rates for individual banks. C) The Federal Reserve manages the stock market. D) The Federal Reserve prints money. Show Answer Correct Answer: A) The Federal Reserve oversees monetary policy, regulates banks, maintains financial stability, and provides financial services. 17. The basic money supply in the United States is made up of currency, coins, and checking account deposits. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 18. A $ 5000 deposit is made. The current reserve ratio is .1. How much money will the bank have in excess reserves? A) $ 500. B) $ 4500. C) $ 5000. D) $ 2500. Show Answer Correct Answer: B) $ 4500. 19. Barter trading will occurs when there is a ..... A) Singular of interest. B) Bargaining intermediary. C) Double coincidence of wants. D) Sufficient supply of cash. Show Answer Correct Answer: C) Double coincidence of wants. 20. If legal reserve ratio is 20% the value of money multiplier would be A) 2. B) 3. C) 5. D) 4. Show Answer Correct Answer: C) 5. 21. Credit creation by the commercial bank is determined by A) Cash reserve ratio. B) Statutory liquidity ratio. C) Initial deposit. D) All of the above. Show Answer Correct Answer: D) All of the above. 22. How many quarters make 1 dollar? A) 2. B) 3. C) 4. D) 5. Show Answer Correct Answer: C) 4. 23. When the Federal Reserve wants to encourage the economy to grow, what does it do with the money supply? A) Increase the money supply. B) Decrease the money supply. C) Sell all of its assets. D) Issue more government securities. Show Answer Correct Answer: A) Increase the money supply. 24. There are ..... Regional Federal Reserve Banks, and one Federal Reserve Board of Governors. A) 50. B) 4. C) 12. D) 52. Show Answer Correct Answer: C) 12. 25. Assume that the reserve requirement is 20 percent, but banks voluntarily keep some excess reserves. A $ 1 million increase in new reserves will result in A) An increase in the money supply of $ 5 million. B) An increase in the money supply of less than $ 5 million. C) A decrease in the money supply of $ 5 million. D) A decrease in the money supply of more than $ 5 million. Show Answer Correct Answer: B) An increase in the money supply of less than $ 5 million. ← 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