This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 52 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 52 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The central bank must increase the repo rate during deficient demand A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 2. What is a cheque and how is it used? A) A cheque is a form of identification required for banking services. B) A cheque is a type of credit card used for online purchases. C) A cheque is a written order to a bank to pay a specified amount to a designated person or entity. D) A cheque is a digital currency used for instant transactions. Show Answer Correct Answer: C) A cheque is a written order to a bank to pay a specified amount to a designated person or entity. 3. Which of the following is a type of financial institution? A) Credit Union. B) Investment Fund. C) Bank. D) Insurance Company. Show Answer Correct Answer: C) Bank. 4. Would you want to work in a place that gives you twice the pay of your current job but not proper working conditions and why? A) Yes, because they are giving twice the pay and money is important. B) No, because non wage factors have to be considered while taking a job. C) All the above. D) None of the above. Show Answer Correct Answer: B) No, because non wage factors have to be considered while taking a job. 5. Below are the secondary functions of commercial, EXCEPT ..... A) Lend to government. B) Clearing cheque. C) Offer credit card. D) Offer internet banking. Show Answer Correct Answer: A) Lend to government. 6. In India, LRR is determined by the commercial banks themselves A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 7. The Central bank can increase availability of credit by: A) Raising repo rate. B) Raising Reserve Repo Rate. C) Buying government securities. D) Selling government securities. Show Answer Correct Answer: C) Buying government securities. 8. Money that people can gain access to easily and immediately to pay for goods and services A) M1. B) M2. C) Interest. D) Commodity money. Show Answer Correct Answer: A) M1. 9. Maximum credit that commercial bank can legally creat depends on their A) Gold Reserve. B) Legal reserve ratio( LRR). C) CRR. D) SLR. Show Answer Correct Answer: B) Legal reserve ratio( LRR). 10. What is the purpose of the Securities and Exchange Commission (SEC)? A) To oversee transportation infrastructure. B) To protect investors and maintain fair, orderly, and efficient markets. C) To regulate the food industry. D) To promote international trade agreements. Show Answer Correct Answer: B) To protect investors and maintain fair, orderly, and efficient markets. 11. Bank of banks:provides banking services for commercial banks and government. Has a unanimous right to issue bank notes and is responsible for the monetary system and monetary policy of the country or a monetary union. A) Central bank. B) Commercial bank. C) All the above. D) None of the above. Show Answer Correct Answer: A) Central bank. 12. Adverse Selection is a type of asymmetric information problem that occurs ..... the transaction A) After. B) Before. C) All the above. D) None of the above. Show Answer Correct Answer: B) Before. 13. What kind of interest includes "interest paid on interest" ? A) Simple interest. B) Compound interest. C) Complex interest. D) Profit. Show Answer Correct Answer: B) Compound interest. 14. Why the use of money is better than barter? A) Barter finds easy double coincidence of wants. B) Barter avoids indivisibility of goods. C) In barter durability issue might arise. D) None of the above. Show Answer Correct Answer: D) None of the above. 15. If you are earning interest, then which type of interest would more likely lead to more earnings? A) Simple interest. B) Compound interest. C) All the above. D) None of the above. Show Answer Correct Answer: B) Compound interest. 16. A student records her income and spending for past month, she uses the function of money A) Medium of exchange. B) Standard of deferred payments. C) Unit of account. D) Store of value. Show Answer Correct Answer: C) Unit of account. 17. Who regulates money supply in India? A) Government of India. B) Reserve Bank of India. C) Commercial Banks. D) Planning Commission. Show Answer Correct Answer: B) Reserve Bank of India. 18. Priya, Mia, and Benjamin are planning their high school budget. Can you help them identify some common expenses they should consider? A) Textbooks, school supplies, transportation costs, lunch or meals, extracurricular activities, and personal expenses. B) Clothing, music lessons, summer camps. C) Cell phone bills, movie tickets, video games. D) Tuition fees, field trips, sports equipment. Show Answer Correct Answer: A) Textbooks, school supplies, transportation costs, lunch or meals, extracurricular activities, and personal expenses. 19. Which of the following is NOT a policy instrument of Bank Negara Malaysia? A) Open market operations. B) The tax rate imposed on interest income. C) The interest rate charged on loans to bank members. D) The amount of required reserves held by banks members. Show Answer Correct Answer: B) The tax rate imposed on interest income. 20. Which of the following is NOT a limitation of the barter system? A) High Transaction Speed. B) Search Cost. C) Lack of Common Unit of Measurement. D) Lack of Double Coincidence of Wants. Show Answer Correct Answer: A) High Transaction Speed. 21. Which are the following are NOT functions of commercial banks in credit creation? A) Accept deposits. B) Provide loans. C) Issue bank drafts. D) Control foreign exchange. Show Answer Correct Answer: D) Control foreign exchange. 22. How quickly an asset can be converted into cash is known as what? A) Liquidity. B) Ease of Withdraw. C) Transferability. D) Ease of Access. Show Answer Correct Answer: A) Liquidity. 23. People sell goods for money and use the money for buying goods they want. Which is this function of money? A) Medium of exchange. B) Unit of Account. C) Store of value. D) Deferred payment. Show Answer Correct Answer: A) Medium of exchange. 24. When interest rates rise, demand for money: A) Increases. B) Decreases. C) Remains constant. D) Becomes infinite. Show Answer Correct Answer: B) Decreases. 25. Which account is effective for storing emergency money? A) Checking Account. B) Savings Account. C) Money Market Deposit Account. D) Certificate of Deposit. Show Answer Correct Answer: B) Savings Account. ← 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