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

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Are you ready to test your knowledge of Money and Banking from the Class 12 Economics syllabus? This chapter explains the functions of money, the role of the central bank, and the credit creation process in an economy. Understanding these concepts is crucial for CBSE board exams and competitive exams.

About the Quiz

  • Chapter Name: Money and Banking
  • Subject: Economics
  • Book: NCERT Class 12 Economics
  • Question Type: Multiple Choice Questions (MCQs)
  • Leaderboard: Yes (Check Your Rank!)

Why Take This Quiz?

✔ Helps in CBSE board exam revision
✔ Strengthens understanding of monetary policy and banking system
✔ Enhances knowledge of RBI’s role in regulating money supply
✔ Track your progress with the leaderboard

Click Below to Start the Quiz!

Chapter 2 Money and Banking

1 / 15

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

2 / 15

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  • Reason(R): Demand Deposits are non-withdrawable in nature and cannot be withdrawn against the issue of cheques and other similar instruments of payment.

3 / 15

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

4 / 15

Read the following statements carefully and choose the correct alternative from the following:

  • Statement 1 – Demonetization was the step taken by the Government of India in order to tackle the problems of corruption, black money, terrorism, and circulation of fake currency in the Indian Economy.

  • Statement 2 – Demonetization has ensured improved tax compliance in India over the period of time.

5 / 15

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

6 / 15

Supply of money refers to the quantity of money

7 / 15

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)

8 / 15

“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:

9 / 15

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

10 / 15

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

11 / 15

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

12 / 15

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

13 / 15

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?

14 / 15

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

15 / 15

Which of the following formulae is INCORRECT?

Your score is

The average score is 77%

Leaderboard – Top Scorers

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Pos.NameScoreDurationPoints
1rimon100 %1 minutes 14 seconds15
2vj93 %4 minutes 3 seconds14
3Bhawna93 %7 minutes 43 seconds14
4yup87 %2 minutes 28 seconds13
5sneha87 %3 minutes 13 seconds13
6Roni87 %4 minutes 53 seconds13
7Suraj87 %5 minutes 34 seconds13
8Tushar kumar80 %3 minutes 41 seconds12
9AP80 %4 minutes 48 seconds12
10raj80 %8 minutes 31 seconds12
11jsks73 %5 minutes 43 seconds11
12cookie67 %12 minutes 37 seconds10
13abs60 %7 minutes 31 seconds9
14preethi53 %8 minutes 46 seconds8
15Tushar kumar53 %18 minutes 11 seconds8
16ss47 %9 minutes 44 seconds7

Key Topics Covered in the Quiz

✔ Functions of Money – Medium of exchange, Store of value, Unit of account
✔ Money Supply & Its Measures (M1, M2, M3, M4)
✔ Functions of Commercial Banks – Credit creation process
✔ Role of the Reserve Bank of India (RBI) – Monetary policy tools (CRR, SLR, Repo Rate, Reverse Repo Rate)
✔ Instruments of Credit Control – Quantitative & Qualitative methods

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