12th Class Economics Money And Banking Question Bank

done MCQs - Money and Banking Total Questions - 47

• question_answer1)
  A farmer exchanges wheat for cloth. This system of exchange is referred to as ......... .
  A)
  Barter done clear
  B)
  Monetary Exchange done clear
  C)
  Self-consumption done clear
  D)
  None of these done clear
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• question_answer2)
  'A' has a good that 'B' wants and 'B' has a good that 'A' wants. This is referred to as ............... under barter system of exchange.
  A)
  Unit of account done clear
  B)
  Store of value done clear
  C)
  Double coincidence of want done clear
  D)
   None of the above done clear
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• question_answer3)
  ............ money refers to the money backed by the authority of the government.
  A)
  Legal done clear
  B)
  Fiat done clear
  C)
  Authorised done clear
  D)
  Allot these done clear
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• question_answer4)
  Cheques are examples of............ money.
  A)
  Fiduciary done clear
  B)
  Legal done clear
  C)
  Fiat done clear
  D)
  None of these done clear
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• question_answer5)
  Money is used as a standard for deferred payments.
  A)
  True done clear
  B)
  False done clear
  C)
  Partially true done clear
  D)
  Incomplete statement done clear
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• question_answer6)
  In credit money, the money value is less than the commodity value.
  A)
  True done clear
  B)
  False done clear
  C)
  Partially true done clear
  D)
  Incomplete statement done clear
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• question_answer7)
  Loans offered by commercial banks ......... the money supply in the economy.           (CBSE 2020, Modified)
  A)
  Increase done clear
  B)
  Decrease done clear
  C)
  Unchanged done clear
  D)
  None of these done clear
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• question_answer8)
  In the present COVID-19 times, many economists have raised their concerns that Indian economy may have to face a deflationary situation, due to reduced economic activities in the country. Suppose you are a member of the high-powered committee constituted by the Reserve Bank of India (RBI). You have suggested that as the supervisor of commercial banks, ................ of the money supply be ensured, by the Reserve Bank of India (RBI).
  A)
  Restriction done clear
  B)
  Release done clear
  C)
  Either [a] or [b]   done clear
  D)
  None of the above done clear
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• question_answer9)
  Supply of money refers to ......... .                                                                                                (CBSE SQP 2020-21)
  A)
  currency held by the public done clear
  B)
  currency held by Reserve Bank of India(RBI) done clear
  C)
  currency held by the public and demand deposits with commercial banks done clear
  D)
  currency held in the government account done clear
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• question_answer10)
  ......... is the agent and adviser to the Government of India.                                                 (CBSE 2020, Modified)
  A)
  RBI done clear
  B)
  Commercial Banks done clear
  C)
  Ministry of Finance done clear
  D)
  None of the above done clear
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• question_answer11)
  The main aim of monetary policy is                                                                                              (CBSE 2020)
  A)
  to bring price stability in the economy. done clear
  B)
  employment generation in the country. done clear
  C)
  to increase trade surplus. done clear
  D)
  to generate greater tax revenue. done clear
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• question_answer12)
  'All financial institutions are banking institutions.'                                                                 (CBSE 2020, Modified)
  A)
  True done clear
  B)
  False done clear
  C)
  Partially true done clear
  D)
  Can't be predicted done clear
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• question_answer13)
  Write the correct pair.

  	Column I		Column II
  A.	C + DD + OD + Net Time Deposits with Commercial Banks	(i)	\[{{M}_{1}}\] measure of money supply
  B.	C + DD + OD + Deposits with Post Office Saving Bank	(ii)	\[{{M}_{2}}\] measure of money supply
  C.	C + DD + OD +Total Deposits of Post Office Saving Bank	(iii)	\[{{M}_{3}}\] measure of money supply
  D.	C + DD + OD	(iv)	\[{{M}_{4}}\] measure of money

  A)
  A - (i)  done clear
  B)
  B - (ii) done clear
  C)
  C - (iii) done clear
  D)
  D - (iv) done clear
  View Solution play_arrow

• question_answer14)
  Match the correct pair from given below.

  	Column I		Column II
  A.	Limited Legal Tender	(i)	RBI
  B.	Unlimited Legal Tender	(ii)	Coins
  C.	Banker to the Public	(iii)	Currency Notes
  D.	Banker to the Government Banks	(iv)	Commercial

  Choose from the options given below.
  A)
  A-(i)      B-(iii)     C-(ii)     D-(iv) done clear
  B)
  A-(ii)     B-(i)      C-(iv)    D-(iii) done clear
  C)
  A-(ii)     B-(iii)     C-(iv)    D-(i) done clear
  D)
  A-(ii)     B-(iv)    C-(i)      D-(iii) done clear
  View Solution play_arrow

• question_answer15)
  Choose the incorrect pair from the given below.

  	Column I		Column II
  A.	Currency Authority	(i)	RBI
  B.	Creator of Money Banks	(ii)	Commercial
  C.	Issuer of Limited Legal Tender	(iii)	Central Government

  Choose from the option below.
  A)
  A-(i) done clear
  B)
  B-(ii) done clear
  C)
  C-(iii) done clear
  D)
  All of the above pairs are correct done clear
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• question_answer16)
  Value of Money Multiplier ......... with an increase in Cash Reserve Ratio.                   (CBSE SQP 2019-20)
  A)
  Increase done clear
  B)
  Decrease done clear
  C)
  Remain unchanged done clear
  D)
  None of these done clear
  View Solution play_arrow

• question_answer17)
  Choose the incorrect pair from given below.

  	Column I		Column II
  A.	\[{{M}_{1}}\]	(i)	Narrow Money
  B.	\[{{M}_{2}}\]	(ii)	Monetary Base
  C.	\[{{M}_{3}}\]	(iii)	Broad Money

  Choose from the options given below.
  A)
  A - (i) done clear
  B)
  B - (ii) done clear
  C)
  C - (iii) done clear
  D)
  All of the above pairs are incorrect done clear
  View Solution play_arrow

• question_answer18)
  \[{{M}_{1}}\]= Currency will Public +......... + Other Deposits with RBI
  A)
  Time deposits with post offices done clear
  B)
  Demand deposits with commercial banks done clear
  C)
  Time deposits with commercial banks done clear
  D)
  Demand deposits with post offices done clear
  View Solution play_arrow

• question_answer19)
  Which of the following is not a part of \[{{M}_{1}}\]?
  A)
  Time deposit done clear
  B)
  Demand deposit done clear
  C)
  Both [a] and [b] done clear
  D)
  Neither [a] nor [b] done clear
  View Solution play_arrow

• question_answer20)
  Money multiplier is equal to
  A)
  1/CRR done clear
  B)
  1/SLR done clear
  C)
  1/LRR  done clear
  D)
  None of these done clear
  View Solution play_arrow

• question_answer21)
  If LRR is equal to 25%, what will be the value of credit multiplier?
  A)
  4 done clear
  B)
  5 done clear
  C)
  6 done clear
  D)
  Can't be determined done clear
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• question_answer22)
  At a given point in time, money multiplier is equal to 10. What will be the value of legal reserve ratio?
  A)
  10% done clear
  B)
  15% done clear
  C)
  20% done clear
  D)
  25% done clear
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• question_answer23)
  What will be the total amount of money created in the system if legal reserves ratio is 20% and primary deposits are Rs. 1,000?
  A)
  Rs. 1,000 done clear
  B)
  Rs. 2,000 done clear
  C)
  Rs. 3,000 done clear
  D)
  Rs. 5,000 done clear
  View Solution play_arrow

• question_answer24)
  Which of following measures of money supply is considered as monetary base?
  A)
  \[{{M}_{1}}\] done clear
  B)
  \[{{M}_{2}}\] done clear
  C)
  \[{{M}_{3}}\]  done clear
  D)
   \[{{M}_{4}}\] done clear
  View Solution play_arrow

• question_answer25)

  Which of the following is / are not an assumption(s) of credit creation process?

  (i) Entire banking system is taken as a single unit.

  (ii) All transactions are done through banks.

  (iii) There is no saving in the economy.

  A)
  Only (i) done clear
  B)
  Only (ii) done clear
  C)
  Only (iii) done clear
  D)
  Both (i) and (ii) done clear
  View Solution play_arrow

• question_answer26)
  Dear money policy of central bank, which is used to keep the growth steady and in-line with other economic factors, refers to
  A)
  Tighten the money supply in the economy done clear
  B)
  Ease the money supply in the economy done clear
  C)
  Allow commercial banks to work under less strict environment done clear
  D)
  Both [b] and [c] done clear
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• question_answer27)
  Identify the correct sequence of alternatives given in Column II by matching them with respective terms in Column I.

  	Column I		Column II
  A.	Accept deposits	(i)	Central Bank
  B.	Lender of last resort	(ii)	Qualitative instrument
  C.	Margin requirements	(iii)	Quantitative instrument
  D.	Statutory Liquidity Ratio (SLR)	(iv)	Commercial Bank

  Codes
  A)
  A-(i)      B-(ii)     C-(iii)     D-(iv) done clear
  B)
  A-(ii)     B-(iii)     C-(iv)    D-(i) done clear
  C)
  A-(iii)     B-(iv)    C-(i)      D-(ii) done clear
  D)
  A-(iv)    B-(i)      C-(ii)     D-(iii) done clear
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• question_answer28)
  Identify the incorrect statement from given below.
  A)
  Present currency can work as money as it is a legal tender. done clear
  B)
  Coins held by the public are limited legal tender. done clear
  C)
  Central bank prints currency in India. done clear
  D)
  Central bank do not deal with general public. done clear
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• question_answer29)
  Credit creation depends on ......... .
  A)
  Initial level of deposit done clear
  B)
  Money multiplier done clear
  C)
  Both [a] and [b] done clear
  D)
  None of the above done clear
  View Solution play_arrow

• question_answer30)
  Choose the correct statement from given below.
  A)
  Commercial banks create credit out of primary deposits. done clear
  B)
  Money multiplier is directly related to legal reserve ratio. done clear
  C)
  Central bank of the country is not authorised to maintain foreign exchange reserve. done clear
  D)
  All of the above done clear
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• question_answer31)
  Gross demand deposits include inter-bank claims whereas net demand deposits do not include inter-bank claims.
  A)
  True done clear
  B)
  False done clear
  C)
  Partially true done clear
  D)
  Incomplete statement done clear
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• question_answer32)
  Which of the following systems is followed by Reserve Bank of India for issuing currency?
  A)
  Minimum reserve system done clear
  B)
  Proportionate system done clear
  C)
  Fixed fiduciary issue system done clear
  D)
  Simple deposit system done clear
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• question_answer33)
  Central Bank of a country does not deal with...........
  A)
  State Government done clear
  B)
  General Public done clear
  C)
  Central Government done clear
  D)
  Commercial banks done clear
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• question_answer34)
  India legal reserve ratio is set by the commercial banks.
  A)
  True done clear
  B)
  False done clear
  C)
  Partially true done clear
  D)
  Can't say done clear
  View Solution play_arrow

• question_answer35)
  Who regulates money supply?
  A)
  Government of India done clear
  B)
  Reserve Bank of India done clear
  C)
  Commercial Bank done clear
  D)
  Planning Commission done clear
  View Solution play_arrow

• question_answer36)
  Central Bank prints currency in the country.
  A)
  True  done clear
  B)
  False done clear
  C)
  Partially true done clear
  D)
  Can't say done clear
  View Solution play_arrow

• question_answer37)
  The Central Bank is the sole supplier of money in an economy.
  A)
  True  done clear
  B)
  False done clear
  C)
  Partially true done clear
  D)
  Can't say done clear
  View Solution play_arrow

• question_answer38)
  Which of the following reserves is kept with the commercial banks?
  A)
  Cash Reserve Ratio done clear
  B)
  Statuary Liquidity Ratio done clear
  C)
  Both [a] and [b] done clear
  D)
  Neither [a] nor [b] done clear
  View Solution play_arrow

• question_answer39)
  ........... refers to money backed by the order or authority of the government.
  A)
  Legal tender money done clear
  B)
  Fiduciary money done clear
  C)
  Fiat money done clear
  D)
  Both [a] and [c] done clear
  View Solution play_arrow

• question_answer40)
  What is meant by cash reserve ratio?
  A)
  Fraction of total deposits kept with banks done clear
  B)
  Fraction of time deposits kept with banks done clear
  C)
  Fraction of demand deposits kept with banks done clear
  D)
  None of the above done clear
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• question_answer41)
  Credit Cards are issued by ..........
  A)
  Commercial Banks done clear
  B)
  Central Bank done clear
  C)
  General Government done clear
  D)
  Both [a] and [b] done clear
  View Solution play_arrow

• question_answer42)
  Non-Chequable deposits are those
  A)
  Against which no money can be withdrawn done clear
  B)
  Against which money can be withdrawn but cheque done clear
  C)
  They have a fixed maturity done clear
  D)
  Both [a] and [c] done clear
  View Solution play_arrow

• question_answer43)
  Which of the following is/are the important component(s) of credit creation process?
  A)
  Legal reserves done clear
  B)
  Bank rate done clear
  C)
  Primary deposits  done clear
  D)
  Both [a] and [c] done clear
  View Solution play_arrow

• question_answer44)
  Which of the following is the short-term borrowing rate of commercial bank?
  A)
  Bank rate done clear
  B)
  Repo rate done clear
  C)
  Reverse rate done clear
  D)
  Both [a] and [b] done clear
  View Solution play_arrow

• question_answer45)
  If total amount of money created in the system is Rs. 10,000 with legal reserve ratio being 25%. How much will be the primary deposits?
  A)
  Rs. 1,500 done clear
  B)
  Rs. 2,000 done clear
  C)
  Rs. 2,500 done clear
  D)
  Rs. 4,000 done clear
  View Solution play_arrow

• question_answer46)
  The rate at which commercial banks park their excess reserves is known as
  A)
  Repo rate done clear
  B)
  Bank rate done clear
  C)
  Open market sales done clear
  D)
  Reverse repo rate done clear
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• question_answer47)
  The volume and direction of money supply in the economy is controlled by..........
  A)
  Commercial Banks done clear
  B)
  Central Bank done clear
  C)
  Central Government done clear
  D)
  Both [b] and [c] done clear
  View Solution play_arrow