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

Identify which of the following bank does not interact directly with the general public? (Choose the correct alternative)v

“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:

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?

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)

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

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

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

In a hypothetical economy, Mr. Neeraj has deposited ₹100 in the bank. If it is assumed that there is no other currency circulation in the economy, then the total money supply in the economy will be ________________. (Fill up the blank with the correct alternative)

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

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?

Supply of money refers to the quantity of money

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

Money can be used to transfer purchasing power from the present to the future. Which specific function of money is this called?

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

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