This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 50 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 50 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following statements are correct about money A) It is a medium of exchange. B) It is acceptable to all. C) It acts as a measure of value of the goods and services. D) All. Show Answer Correct Answer: D) All. 2. Central banks are the ..... of cash reserves A) Agent. B) Custodian. C) Bank. D) None of the above. Show Answer Correct Answer: B) Custodian. 3. What sentence has the same meaning as "we splashed out on out last party": A) We saved a lot of money on our last party. B) We didn't save money on the party. C) We spent a lot of money on our last party. D) We didn't spend a lot of money on our last party. Show Answer Correct Answer: C) We spent a lot of money on our last party. 4. If you want to save money, you can open a ..... A) Bank. B) Savings account. C) Current account. D) Cashpoinit. Show Answer Correct Answer: B) Savings account. 5. Which type of account allows your deposited money to be withdrawn at any time by writing a check? A) Savings Account. B) Certificate of Deposit. C) Certified Cash Account. D) Checking Account. Show Answer Correct Answer: D) Checking Account. 6. "Feeling good about one's life" is the definition of A) Value. B) Need. C) Want. D) Well-being. Show Answer Correct Answer: D) Well-being. 7. Which of the following system is followed by RBI for issuing currency? A) Proportionate system. B) Simple deposit system. C) Minimum reserve system. D) Fixed fiduciary issue system. Show Answer Correct Answer: C) Minimum reserve system. 8. Checkable deposits are also known as ..... A) REPO. B) Currency. C) Near money. D) Demand deposit. Show Answer Correct Answer: D) Demand deposit. 9. The price paid to use someone else's money A) Credit. B) Loan. C) Interest. D) Debit. Show Answer Correct Answer: C) Interest. 10. Penny is an artist, and John is a carpenter. Penny agrees to paint a portrait of John's family in exchange for a handmade table created by John. How did Penny and John pay for the goods in their transaction? A) Using a store of value. B) With money. C) Through bartering. D) With currency. Show Answer Correct Answer: C) Through bartering. 11. Which of these situations is most likely to cause the Fed to introduce a tight money supply? A) A recession has reduced aggregate demand and increased unemployment. B) The federal government passes a new budget with a large deficit. C) The economy is prosperous with relatively low inflation and low unemployment. D) The economy is expanding quickly and inflation is a concern. Show Answer Correct Answer: D) The economy is expanding quickly and inflation is a concern. 12. What is the purpose of Open Market Operations by the Central Bank? A) Sale and purchase of securities to regulate liquidity. B) Issuing currency notes. C) Providing loans to commercial banks. D) Managing foreign exchange reserves. Show Answer Correct Answer: A) Sale and purchase of securities to regulate liquidity. 13. What is investing? A) Spending money on anything you want. B) Saving money constantly. C) Using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. D) Setting aside money for future use. Show Answer Correct Answer: C) Using money in hopes of gaining more in the future by lending to businesses in exchange for a share of profits. 14. In the story, Lala the goldsmith created money by: A) Printing notes. B) Issuing more receipts than gold held. C) Mining gold. D) Selling wheat. Show Answer Correct Answer: B) Issuing more receipts than gold held. 15. ..... is the main source of money supply in India. A) Central bank. B) Commercial banks. C) Both (i) and (ii). D) Government. Show Answer Correct Answer: C) Both (i) and (ii). 16. Which policy instrument involves persuading commercial banks to follow directives on credit flow? A) Cash Reserve Ratio. B) Moral Suasion. C) Open Market Operation. D) Repo Rate. Show Answer Correct Answer: B) Moral Suasion. 17. A banking system that keeps only a small portion of deposits on hand and lends out the rest. A) Fractional Reserve Banking. B) Federal Reserve System. C) Federal Deposit Insurance Corporation. D) Credit Union. Show Answer Correct Answer: A) Fractional Reserve Banking. 18. Credit control system means: A) Contraction credit only. B) Extension of credit only. C) Extension and contraction of money supply. D) None of these. Show Answer Correct Answer: C) Extension and contraction of money supply. 19. Liam wants cash from his bank, but it is closed, He will use the ATM. A) Credit card. B) Debit card. C) Savings account. D) None of the above. Show Answer Correct Answer: B) Debit card. 20. Which of the following best illustrates the function of money as a medium of exchange? A) Saving money in a bank account for future use. B) Using money to compare the value of different goods. C) Receiving money in return for providing a service. D) Using money to measure the worth of an item. Show Answer Correct Answer: C) Receiving money in return for providing a service. 21. Accepting deposits from individuals or firms and providing loans to the public are the basic function of ..... A) Financial institution. B) Commercial banks. C) Insurance company. D) Bank Negara Malaysia. Show Answer Correct Answer: B) Commercial banks. 22. 1 of the 3 functions of money that allows it to serve as a common denominator to measure value. A) Measure of value. B) Store of value. C) Divisibility. D) Medium of exchange. Show Answer Correct Answer: A) Measure of value. 23. Explain the process of creating money through the banking system. A) Banks create money by selling products to customers. B) Money is created by the government printing more currency. C) Money is generated through individuals saving in banks. D) Banks create money through the process of issuing loans to customers. Show Answer Correct Answer: D) Banks create money through the process of issuing loans to customers. 24. Which type of depository institution has account holder requirements, such as employment at a certain company. A) Commercial bank. B) Federal Reserve. C) Savings and Loan. D) Credit Union. Show Answer Correct Answer: D) Credit Union. 25. What is the significance of credit scores in banking? A) Credit scores are only relevant for credit card applications. B) Credit scores have no impact on mortgage rates. C) Credit scores are significant in banking as they determine a borrower's creditworthiness and influence loan approval and interest rates. D) Credit scores are determined solely by income level. Show Answer Correct Answer: C) Credit scores are significant in banking as they determine a borrower's creditworthiness and influence loan approval and interest rates. ← 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