This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 49 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 49 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. How does the RBI manage liquidity in the banking system? A) By limiting the number of ATMs in circulation. B) The RBI manages liquidity using tools like CRR, SLR, open market operations, and repo rates. C) By adjusting interest rates on savings accounts. D) Through direct government funding to banks. Show Answer Correct Answer: B) The RBI manages liquidity using tools like CRR, SLR, open market operations, and repo rates. 2. What is the role of the Central Bank in controlling money supply? A) By changing the reserve ratio. B) By conducting open market operations. C) By changing the bank rate. D) All of the above. Show Answer Correct Answer: D) All of the above. 3. What is the purpose of the repo rate set by the Central Bank? A) To control inflation. B) To regulate interest rates in the economy. C) To limit the amount of credit creation by banks. D) To stabilize the stock market. Show Answer Correct Answer: B) To regulate interest rates in the economy. 4. A commercial bank chartered by the federal government. A) Money Supply. B) Gold Standard. C) National Bank. D) Bank. Show Answer Correct Answer: C) National Bank. 5. Which monetary aggregate represents the most liquid form of money? A) M1. B) M2. C) M3. D) M4. Show Answer Correct Answer: A) M1. 6. Financial intermediaries are able to reduce transaction costs because of A) Economies of scale and expertise. B) Discounts. C) Mutual funds. D) Diversification of portfolio. Show Answer Correct Answer: A) Economies of scale and expertise. 7. Who insures deposits in commercial banks? A) State Farm. B) FDIC. C) NCUA. D) Federal Reserve. Show Answer Correct Answer: B) FDIC. 8. If a loan is repaid at a commercial bank then A) Commercial bank assets are increased. B) Money is destroyed. C) Commercial bank assets are decreased. D) Money is created. Show Answer Correct Answer: B) Money is destroyed. 9. Unit of account is the unit in which prices are quoted and ..... are kept. A) Values. B) Amounts. C) Measurements. D) Accounts. Show Answer Correct Answer: D) Accounts. 10. Under what monetary standard does the United States currently operate? A) The gold standard. B) The inconvertible fiat money standard. C) The silver standard. D) The greenback standard. Show Answer Correct Answer: B) The inconvertible fiat money standard. 11. In the Roman period ..... a gold coin was the standerd currency A) Pound. B) Desant. C) Shilling. D) Pana. Show Answer Correct Answer: B) Desant. 12. With an increase in margin requirement, availability of credit in the economy: A) Increases. B) Decreases. C) Unchanged. D) None of these. Show Answer Correct Answer: B) Decreases. 13. What is the main problem of barter system? A) The item can be divided into smaller part. B) It is not popular among the traders. C) It has to be mutually agreed by both traders. D) Money was created before. Show Answer Correct Answer: C) It has to be mutually agreed by both traders. 14. Sparkonto A) Savings account. B) Saviour account. C) Sales account. D) Sand account. Show Answer Correct Answer: A) Savings account. 15. Pension funds are primarily designed to: A) Provide short-term loans to businesses. B) Offer life insurance policies. C) Manage retirement savings for individuals. D) Fund high-risk startup ventures. Show Answer Correct Answer: C) Manage retirement savings for individuals. 16. The problem with Continental dollars was that A) So much was printed they became nearly worthless. B) They were backed by gold and not silver. C) They were fiat money. D) They were backed by individual states. Show Answer Correct Answer: A) So much was printed they became nearly worthless. 17. Which of the statements gives an accurate picture of the effect of the rise of the reverse repo rate by the central bank of a country? A) The demand for goods and services in the country will decrease. B) The demand for goods and services in the country will increase. C) The demand for goods and services in the country may increase or decrease. D) There is no effect on the demand for goods and services in the country. Show Answer Correct Answer: A) The demand for goods and services in the country will decrease. 18. What are the functions of the Bank of Issue by the RBI? A) The functions of the Bank of Issue by the RBI include issuing currency notes, managing currency supply, and ensuring currency integrity. B) Regulating interest rates. C) Providing loans to individuals. D) Managing foreign exchange reserves. Show Answer Correct Answer: A) The functions of the Bank of Issue by the RBI include issuing currency notes, managing currency supply, and ensuring currency integrity. 19. A function of money is to act as a measure of value. What does this mean? A) It is used to compare the worth of different goods. B) It is used to enable monthly payments for expensive goods. C) It is used to pay the price of a good. D) It is used for future savings. Show Answer Correct Answer: A) It is used to compare the worth of different goods. 20. Paper currency issued by the fed A) Washington Notes. B) State Notes. C) Federal Reserve Notes. D) Specie. Show Answer Correct Answer: C) Federal Reserve Notes. 21. What is the best explanation of 'standard for deferred payment'as a function of money? A) Money can be used for a long period of time. B) Money can be used for future payments. C) Money can measure good's value. D) Money can be used to buy goods. Show Answer Correct Answer: B) Money can be used for future payments. 22. Where do people keep their money safe? A) Under a pillow. B) At the bank. C) In the garden. D) In the kitchen. Show Answer Correct Answer: B) At the bank. 23. When RBI act as a banker to the government. what does it do? A) It carries out government transaction. B) Advise on monetary and financial matter. C) It keeps account of government. D) All of the above. Show Answer Correct Answer: D) All of the above. 24. Which historical form of money represents a transition between commodity money and pure fiat money? A) Electronic fund transfers (NEFT/RTGS). B) Bank-issued notes that were directly redeemable for gold or silver. C) Early standardized coins made of base metals (e.g., copper). D) Credit cards and debit cards. Show Answer Correct Answer: B) Bank-issued notes that were directly redeemable for gold or silver. 25. What is the Federal Reserve? A) Agency responsible for international trade. B) Central credit union. C) Agency responsible for collecting taxes. D) Central bank of the U.S. Show Answer Correct Answer: D) Central bank of the U.S. ← 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