Money and Banking Class 12 MCQ Quiz – Test Your Understanding!

A bank ‘run’ occurs when a large number of customers of a bank withdraw their deposits simultaneously. This can cause a bank to become insolvent if it cannot pay back all the depositors. Which of the following facts about a bank make a bank run possible?

Which of the following formulae is INCORRECT?

Find the missing figures and choose the correct alternative:

Which of the following statements about the money supply is correct?

“The value of all goods and services can be expressed in monetary units.” On the basis of the given statement, identify the function performed by money:

Supply of money refers to the quantity of money

The Reserve Bank of India can increase the money supply in the economy by ____________. (Choose the correct alternative)

Identify which of the following is not a function of the Reserve Bank of India? (Choose the correct alternative)

Which of the following agency is responsible for issuing ₹ 1 currency notes in India?

Supply of money refers to……................. (Choose the correct alternative)

What happens to the money multiplier when the Cash Reserve Ratio (CRR) increases?

Ms. Sakshi, an economics teacher, was explaining the concept of a ‘minimum percentage of the total deposits to be kept by any commercial bank with the Central Bank of the country, as per norms and statute prevailing in the country’. From the following, choose the correct alternative which specifies the concept explained by her.

How does a cut in the Repo rate by RBI affect the demand for goods and services?

Which of these do not fall under the purview of the Central Bank?

1. controlling money supply
2. providing loans to citizens
3. issuing currency
4. holding foreign exchange reserves

Suppose in an economy, the initial deposits of ₹ 400 crores lead to the creation of total deposits worth ₹ 4000 crores.

Under the given situation the value of reserve requirements would be________ (Fill up the blank with the correct alternative)