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

Which of the following is not a Quantitative Method of credit control?

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

Read the following statements carefully and choose the correct alternatives given below:

• Statement 1 – The value of the money multiplier is determined by the reserve ratio prevailing in the monetary system.
• Statement 2 – The process of credit creation directly relates to the value of the reserve ratio.

If the legal reserve requirement (LRR) is 20%, what is the value of the money multiplier?

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

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

“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:

_________ is an institution that accepts deposits for lending purposes. (Fill up the blank with the correct alternative)

Read the following statements -Assertion (A) and Reason(R). Choose one of the correct alternatives given below:

• Assertion (A): Demand Deposits are considered a convenient mode of payment for the execution of even high-value transactions.
• Reason(R): Demand Deposits are non-withdrawable in nature and cannot be withdrawn against the issue of cheques and other similar instruments of payment.

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

Credit cards are excluded from all measures of the quantity of money because they are not really a method of payment, but a method of deferring payment. When you buy a meal with a credit card, the bank that issued the card pays the restaurant the amount that is due. At a later date, you will have to repay the bank, perhaps with interest. For this, you might use the money in your demand deposits, and that money is included in the economy's stock of money.

Which of the following can happen with an increased use of credit cards in an economy?

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.

Money supply in India may increase if, ________________(Choose the correct alternative)

1. Reserve Bank of India(RBI) injects more money into circulation
2. Commercial banks expand their credit operation
3. Tax rates are reduced by the Central Government
4. Reserve Bank of India increases the Bank Rate

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

Find the missing figures and choose the correct alternative: