Money and Banking MCQs Mock Test of Class 12th Economics

Welcome to your Money and Banking MCQs Mock Test of Class 12th Economics

1.

Question 1. Which type of currency is issued by Central Bank?

(a) Currency

(b) Credit Money

(c) Coins

(d) All of these

2.

Question 2. Which is the major objective of credit control?

(a) To maintain Price Stability

(b) To stabilize Exchange Rate

(c) To production and Employment

(d) All the above

3.

Question 3. Which one is true?

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(a) Bank rate is a rate at which Central Bank is ready to give credit to commercial banks

(b) Bank rate and interest rates are different

(c) Bank rate is the discount rate of the Central Bank

(d) All the above

4.

Question 4. Which of the following is the feature of money?

(A) General acceptability

(B) Homogeneous unit

(C) Liquid asset

(D) All of these

5.

Question 5. In order to encourage investment in the economy, the Central Bank may ________

(A) Reduce Cash Reserve Ratio

(B) Increase Cash Reserve Ratio

(C) Sell Government securities in the open market

(D) Increase Bank Rate

6.

Question 6. Institution that accepts deposits for lending purpose is known as __________

(A) Commercial Bank

(B) Central Bank

(C) Government

(D) Public

7.

Question 7. Which of the following is the function of a commercial bank?

(A) Accepting deposits

(B) Credit creation

(C) Agency function

(D) All of these

8.

Question 8. The central bank can increase the availability of credit by:

(A) Rasing repo rate

(B) Raising reverse repo rate

(C) Buying government securities

(D) Selling government securities

9.

Question 9. Which type of currency is issued by Central Bank?

(a) Currency

(b) Credit Money

(c) Coins

(d) All of these

10.

Question 10. Which is the major objective of credit control?

(a) To maintain Price Stability

(b) To stabilize Exchange Rate

(c) To production and Employment

(d) All the above

11.

Question 11. Which one is true?

(a) Bank rate is a rate at which Central Bank is ready to give credit to commercial banks

(b) Bank rate and interest rates are different

(c) Bank rate is the discount rate of the Central Bank

(d) All the above

12.

Question 12. Giving permission to withdraw money by an amount more than deposited to is known as _________

(A) Advance

(B) Overdraft

(C) Loan

(D) None of these

13.

Question 13. What are the alternative measures of money supply in India?

(A) M1

(B) M2

(C) M3 and M4

(D) All of these

14.

Question 14. Who circulates all mint and one rupee not in India?

(A) Ministry of Finance

(B) RBI

(C) Ministry of External Affairs

(D) State Government

15.

Question 15. What is the defect of the barter system?

(A) Lack of double coincidence of wants

(B) Difficulty in the measurement of value

(C) Difficulty in store of value

(D) All of these

16.

Question 16. Which of the following is the credit money?

(A) Cheque and draft

(B) Promissory note

(C) Exchange note

(D) All of these

17.

Question 17. Which among the following is the near money?

(A) Bonds

(B) Insurance policy

(C) Securities

(D) All of these

18.

Question 18. Which of the following is the narrow measure of the money supply?

(A) M2

(B) M3

(C) M1

(D) M4

19.

Question 19. When was the minimum reserve system started in India?

(A) 1947

(B) 1948

(D) 1957

20.

Question 20. Which is the most liquid measure of the money supply?

(A) M4

(B) M3

(C) M2

(D) M1

21.

Question 21. High Powered Money includes:

(A) C + DD + OD

(B) C + R + OD

(C) C + R + TD

(D) C + DD + TD

22.

Question 22. Who has the right of note issue?

(A) Central Bank

(B) Commercial Bank

(C) Government

(D) Co-operative Bank

23.

Question 23. Which of the following is the function of a Central bank?

(A) Issue of notes

(B) Banker to the Government and Banks

(C) Supply and control of money

(D) All of these

24.

Question 24. The ratio of total deposits that a commercial bank has to keep with RBI is called:

(A) Statutory liquidity ratio

(B) Deposit ratio

(C) Cash reserve ratio

(D) Legal reserve ratio

25.

Question 25. Demand deposits include

(A) Saving account deposits and fixed deposits

(B) Saving account deposits and current account deposits

(C) Current account deposits and fixed deposits

(D) All type of deposits

26.

Question 26. What are the necessary conditions of the Barter System?

(a) Limited Needs

(b) Limited Exchange Area

(c) Economically Backward Society

(d) All the above

27.

Question 27. What are the advantages of the Barter System?

(a) Simple System

(b) More Mutual Co-operation

(c) No Economic Disparities

(d) All the above

28.

Question 28. Which one is the difficulty of the Barter System?

(a) Lack of Double Coincidence

(b) Difficulty of Division of the Goods

(c) Lack of General Acceptable Measure of Value

(d) All the above

29.

Question 29. Which is the correct order of money evolution?

(a) Commodity Money, Paper Money, Metal Money

(b) Commodity Money, Metal Money, Paper Money, Credit Money

(c) Credit Money, Metal Money, Paper Money

(d) None of the above

30.

Question 30. “Money is what money does.” Who said it?

(a) Hartley Withers

(b) Hawtrey

(c) Thomas

(d) Keynes

31.

Question 31. Which one is included in the primary function of money?

(a) Medium of Exchange

(b) Measure of Value

(c) Both (a) and (b)

(d) Store of Value

32.

Question 32. Which one is included in the secondary function of money?

(a) To make Deferred Payments

(b) Store of Value

(c) Transfer of Value

(d) All of these

33.

Question 33. Indian Monetary System is based on ________

(A) Paper Standard

(B) Metallic Standard

(C) Gold Standard

(D) Credit Money Standard

34.

Question 34. Which of the following is the apex bank of India?

(A) RBI

(B) SBI

(C) SBP

(D) PNB

35.

Question 35. “Money is a pivot around which the whole economy clusters.” Who said it?

(a) Keynes

(b) Robertson

(c) Marshall

(d) Hawtrey

36.

Question 36. The function of money is:

(a) Medium of Exchange

(b) Measure of Value

(c) Store of Value

(d) All the above

37.

Question 37. The functions of money include:

(a) Value determination

(b) Store of value

(c) Means of exchange

(d) All of these

38.

Question 38. Money is a matter which is:

(a) a measure of value

(b) accepted as a means of exchange

(c) used to store wealth

(d) All of these

39.

Question 39. By supply of money we mean :

(a) Money deposited in the bank

(b) Money available with the public

(c) Deposits with post office savings bank

(d) All of these

40.

Question 40. Which of the following is not a function of money?

(a) Medium of exchange

(b) Price stability

(c) Store of value

(d) Unit of account

41.

Question 41. Which one is the Bank of the Public?

(a) Commercial Bank

(b) Central Bank

(c) Both (a) and (b)

(d) None of the above

42.

Question 42. Which function is the Secondary Function of Commercial Banks?

(a) Agency Function

(b) General Utility Function

(c) Social Function

(d) All of these

43.

Question 43. Which is the Agency Function of Commercial Banks?

(a) Advancing Loans

(b) Accepting Deposits

(c) Act as Trustee

(d) Locker Facility

44.

Question 44. Credit Multiplier is:

(a) 1CRR

(b) cash×1 CRR

(c) Cash x CRR

(d) None of these

45.

Question 45. Credit money is increased when CRR:

(a) Falls

(b) Rises

(c) Both (a) and (b)

(d) None of these

46.

Question 46. The full form of ATM is:

(a) Any Time Money

(b) All Time Money

(c) Automated Teller Machine

(d) Both (a) and (b)

47.

Question 47. The main function of a commercial bank is:

(a) Credit control

(b) Loaning to other banks

(c) Accept deposits from customers

(d) All the above

48.

Question 48. What is the Central Bank of India?

(a) Commercial Bank

(b) Central Bank

(c) Private Bank

(d) None of these

49.

Question 49. The primary function of Commercial Bank is?

(a) Accepting Deposits

(b) Advancing Loans

(c) Credit Creation

(d) All of these

50.

Question 50. Deposits accepted by the Commercial Banks:

(a) Current Deposits

(b) Saving Deposits

(c) Time Deposits

(d) All of these

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