This quiz works best with JavaScript enabled. Home > Class 12 > Class 12 Economics (Macro Economics) Chapter 3 Money And Banking – Quiz 57 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 12 Economics (Macro Economics) Chapter 3 Money And Banking Quiz 57 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What is the role of money as a store of value? A) To facilitate barter exchanges. B) To measure the value of goods and services. C) To store wealth for future use. D) To act as a medium of exchange. Show Answer Correct Answer: C) To store wealth for future use. 2. Which of the following is a commonly used measure of money supply in Canada A) M100. B) M2. C) M1. D) M10. Show Answer Correct Answer: B) M2. 3. A sudden panic by depositors to withdraw their paper money from banks. A) Bank run. B) Demand deposits. C) Fractional reserve banking. D) Default. Show Answer Correct Answer: A) Bank run. 4. Credit Unions offer all of the same services as commercial banks but are not "for profit" and require a membership to utilize. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: A) True. 5. What is the function of a central bank? A) Regulate the money supply, set interest rates, supervise commercial banks, ensure financial stability. B) Issue passports, Collect taxes, Conduct military operations. C) All the above. D) None of the above. Show Answer Correct Answer: A) Regulate the money supply, set interest rates, supervise commercial banks, ensure financial stability. 6. Which financial institution primarily provides insurance coverage and collects premiums from policyholders? A) Life insurance companies. B) Factoring companies. C) Credit unions. D) Venture capital firms. Show Answer Correct Answer: A) Life insurance companies. 7. Can I pay ..... cash? A) In. B) With. C) By. D) To. Show Answer Correct Answer: A) In. 8. Which of these tools in an example of monetary policy? A) Reducing income taxes. B) Changing reserve requirements. C) Increasing government spending. D) Borrowing money through deficit spending. Show Answer Correct Answer: B) Changing reserve requirements. 9. Explain the function of money in an economy. A) Money is only used for online transactions. B) Money serves as a medium of exchange, unit of account, store of value, and standard of deferred payment in an economy. C) Money is used for decorating homes. D) Money is used for measuring time. Show Answer Correct Answer: B) Money serves as a medium of exchange, unit of account, store of value, and standard of deferred payment in an economy. 10. Characteristics of money:Divisible- A) It should be broken down into smaller denominations. B) Should be conveniently carried and transferred. C) Should be generally acceptable by all. D) None of the above. Show Answer Correct Answer: A) It should be broken down into smaller denominations. 11. The Federal Reserve System is often called A) The System. B) Supreme Fed System. C) The FED. D) All of the above. Show Answer Correct Answer: C) The FED. 12. What is the impact of inflation on savings? A) It increases the value of savings. B) It decreases the value of savings. C) It has no impact on the value of savings. D) It fluctuates the value of savings. Show Answer Correct Answer: B) It decreases the value of savings. 13. When you stop at the United Dairy Farmers store in Troy, OH to buy a quart of ice cream, you expect that they will allow you to pay in US paper money and coins. This is an example of the ..... characteristic of money. A) Acceptability. B) Durablity. C) Uniformity. D) Divisibility. Show Answer Correct Answer: A) Acceptability. 14. When money is used to acquire goods and services, it is functioning as a A) Medium of exchange. B) Store of value. C) Standard of account. D) Equation of value. Show Answer Correct Answer: A) Medium of exchange. 15. Name one function of commercial banks A) To print money. B) To decide interest rates. C) Lender of last resort. D) To provide loans and overdrafts. Show Answer Correct Answer: D) To provide loans and overdrafts. 16. Using the money multiplier formula (1/RR), how much "new" money can be created with a RR of .25 and an initial excess reserve of $ 800 A) $ 200. B) $ 3200. C) $ 2400. D) $ 800. Show Answer Correct Answer: B) $ 3200. 17. People who are unbanked are most likely to ..... A) Have a high credit score. B) Have a low income. C) Have a college degree. D) Have a mortgage. Show Answer Correct Answer: B) Have a low income. 18. Which institutions perform the activity of credit creation? A) Commercial banks. B) Central Bank. C) Private bank. D) None of these. Show Answer Correct Answer: A) Commercial banks. 19. What is an external benefit if a government decides to subsidize rail travel? A) Lower fares for train passengers. B) A rise in government expenditure. C) Reduced congestion on roads. D) Increased crowding on trains. Show Answer Correct Answer: C) Reduced congestion on roads. 20. The main purpose of Bank Negara Malaysia is to ..... A) Invest in property. B) Print money. C) Grant loans. D) Accept deposit from the public. Show Answer Correct Answer: B) Print money. 21. Who regulates money supply? A) Govt, of India. B) Reserve Bank of India. C) Commercial Bank. D) Planning Commission. Show Answer Correct Answer: B) Reserve Bank of India. 22. OMO can add money by the RBI buying government papers from banks. What does buying do to money in the economy? A) Increases it. B) Stops it. C) Hides it. D) None of the above. Show Answer Correct Answer: A) Increases it. 23. Reverse repo rate is the rate at which ..... A) Farmers can take loan from nationalised banks. B) Commercial bank park their surplus fund to RBI. C) Government can borrow money from RBI. D) Government can borrow money from foreign government. Show Answer Correct Answer: B) Commercial bank park their surplus fund to RBI. 24. Open market operation as an instrument of credit control are performed by A) Central bank of country. B) The commercial bank pof country. C) Both a and b. D) None of these. Show Answer Correct Answer: A) Central bank of country. 25. Currency in India is issued on the basis of A) Legal reserve ratio. B) Minimum reserve system. C) Cash reserve ratio. D) None of the above. Show Answer Correct Answer: B) Minimum reserve system. ← 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