This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 5 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is not an objective of RBI? A) Economic Stability. B) Issue of Currency. C) Advancing Loans to public. D) Maintenance of foreign exchange reserve. Show Answer Correct Answer: C) Advancing Loans to public. 2. A commercial bank has two conflicting goals; A) Interest payments and interest accrual. B) Liabilities and assets. C) Money creation and money destruction. D) Profits and liquidity. Show Answer Correct Answer: D) Profits and liquidity. 3. ..... account is a version of checking account, issued by credit union. A) Share-draft. B) Overdraft. C) NOW. D) Credit. Show Answer Correct Answer: A) Share-draft. 4. What is a subsidy? A) A sum of money given by government as assistance for individuals or firms. B) A sum of money charged by government from individuals or firms. C) A sum of money donated by firms to charity. D) A sum of money given by firms to the government. Show Answer Correct Answer: A) A sum of money given by government as assistance for individuals or firms. 5. Commodity money can best be defines as ..... A) An item that serves the function of money, but has no value as anything else. B) An item that serves the function of money and has other uses. C) The price of currency in relation to another. D) All correct. Show Answer Correct Answer: B) An item that serves the function of money and has other uses. 6. Which of the following statements is true about the money supply? A) It is the total volume of money that is held by the government of a country. B) It is the total volume of money that is held by the general public of a country over a time period. C) It is the total volume of money that is held by the general public of a country at a particular point in time. D) All of the above. Show Answer Correct Answer: C) It is the total volume of money that is held by the general public of a country at a particular point in time. 7. Trade is made easier because of this function of money that eliminates the need to barter (trade goods for goods). A) Store of Value. B) Medium of Exchange. C) Unit of Account. D) Divisibility. Show Answer Correct Answer: B) Medium of Exchange. 8. What are wage factors A) Condition. B) Security. C) Commission. D) Timings. Show Answer Correct Answer: C) Commission. 9. A type of money that has value because it can be exchanged for something else of value (ex. gold). A) Certificate money. B) Representative money. C) Fiat money. D) Commodity money. Show Answer Correct Answer: B) Representative money. 10. If the RBI increases the Bank Rate, money supply in the economy will A) Increase. B) Decrease. C) Remain unchanged. D) None of the above. Show Answer Correct Answer: B) Decrease. 11. The basic functions of ..... include accepting deposits from individuals and firms and providing loans to the public A) A commercial bank. B) Bank Negara Malaysia. C) An insurance company. D) All are correct. Show Answer Correct Answer: A) A commercial bank. 12. Many people who go to see their bank manager have a ..... problem. A) Cash flow. B) Cash-book. C) Cash-book. D) Cashing up. Show Answer Correct Answer: A) Cash flow. 13. Bank belonging to the Federal Reserve System. A) Liquidity. B) Central Bank. C) Member Bank. D) Default. Show Answer Correct Answer: C) Member Bank. 14. When describing a function of money, what does 'a store of value' mean? A) Money is used to exchange for goods and services. B) Money circulates around the economy over time. C) Money may be kept for future spending. D) Money does not lose its value over time. Show Answer Correct Answer: C) Money may be kept for future spending. 15. A business or financial institution that stores and manages money for individuals and other businesses: A) ATM. B) Bank. C) Credit Union. D) Check Cashing Center. Show Answer Correct Answer: B) Bank. 16. Define commercial banks and their role in the economy. A) Commercial banks primarily focus on international trade and export financing. B) Commercial banks are government-owned institutions that do not accept deposits. C) Commercial banks are financial institutions that accept deposits, provide loans, and facilitate economic growth by offering financial services. D) Commercial banks only provide investment advice to clients. Show Answer Correct Answer: C) Commercial banks are financial institutions that accept deposits, provide loans, and facilitate economic growth by offering financial services. 17. The government keep their money in the central bank. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 18. Which of the following is not the instrument of credit control? A) CRR. B) SLR. C) Bank Rate. D) Managed floating. Show Answer Correct Answer: D) Managed floating. 19. Who supplies money in India A) RBI. B) Government. C) Commercial Bank. D) All of these. Show Answer Correct Answer: D) All of these. 20. The rate of interest paid by the Central Bank to the commercial banks on their deposits with the Central Bank is called A) Bank Rate. B) Reverse Repo Rate. C) Repo Rate. D) Discount Rate. Show Answer Correct Answer: B) Reverse Repo Rate. 21. The FDIC was established to A) Protect the savings of the American people. B) Help with the financing of World War II. C) Federalize the banking system. D) Create a government banking monopoly. Show Answer Correct Answer: A) Protect the savings of the American people. 22. The Demand for Money is made up of A) M1. B) Savings Bonds and Securities. C) Real GDP. D) Transactions Demand + Assets Demand. Show Answer Correct Answer: D) Transactions Demand + Assets Demand. 23. T/F:The central bank of a country can be a commercial bank at the same time. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 24. When revenue expenditure is greater than revenue receipts it is called A) Fiscal deficit. B) Primary deficit. C) Revenue deficit. D) None of these. Show Answer Correct Answer: C) Revenue deficit. 25. What is the significance of the Dow Jones Industrial Average? A) It is a key indicator of the stock market's performance and overall economic health. B) It determines the price of gold. C) It predicts the winner of the Super Bowl. D) It measures the temperature of the ocean. Show Answer Correct Answer: A) It is a key indicator of the stock market's performance and overall economic health. ← 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 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