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

Demand Deposits include______ and _________. (Fill up the blank with the correct alternative)

  1. Saving account deposits
  2. Fixed deposits
  3. Current Account Deposits
  4. Post Office Savings

2 / 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?

3 / 15

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.

4 / 15

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

5 / 15

Which of the following formulae is INCORRECT?

6 / 15

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

7 / 15

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.

8 / 15

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?

9 / 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.

10 / 15

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

11 / 15

Find the missing figures and choose the correct alternative:

RoundDepositsLoans (80%)Reserve Ratio (20%)
I1,000800200
II800...(i)...160
Total...(ii)......(iii)......(iv)...

12 / 15

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

13 / 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

14 / 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

15 / 15

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

Your score is

The average score is 70%

Leaderboard – Top Scorers

Check the top scorers here!

Pos.NameScoreDurationPoints
1Akshath100 %2 minutes 21 seconds15
2..b93 %2 minutes 20 seconds14
3Akash93 %31 minutes 22 seconds14
4aha87 %2 minutes 57 seconds13
5Harshit pandey87 %3 minutes 34 seconds13
6harshit pandey87 %4 minutes 35 seconds13
7Devashree87 %4 minutes 42 seconds13
8Rahu87 %7 minutes 35 seconds13
9parnit87 %13 minutes 25 seconds13
10R80 %3 minutes 31 seconds12
11hemi80 %4 minutes 22 seconds12
12Ananyah80 %4 minutes 43 seconds12
13Aakriti80 %5 minutes 2 seconds12
14harshit pandey80 %5 minutes 43 seconds12
15sahil80 %5 minutes 59 seconds12
16Ak80 %6 minutes 35 seconds12
17yash80 %7 minutes 9 seconds12
18mj80 %10 minutes 10 seconds12
19Maggi73 %3 minutes 47 seconds11
20jnv jammu 273 %4 minutes 24 seconds11
21Akshath73 %7 minutes 16 seconds11
22Atul73 %7 minutes 17 seconds11
23Aparna67 %7 minutes 15 seconds10
24Amrin shaji60 %4 minutes 59 seconds9
25mani sir60 %6 minutes 43 seconds9
26Shreya60 %6 minutes 51 seconds9
27BOY MYSTERIOUS60 %8 minutes 25 seconds9
28aakash60 %8 minutes 28 seconds9
29Sharfraz khan60 %3 hours 10 minutes 42 seconds9
30raja53 %3 minutes 13 seconds8
31Dhruv (eco topper anta)53 %3 minutes 40 seconds8
32Zzz53 %4 minutes 17 seconds8
33Anika53 %25 minutes 58 seconds8
34Jayashree47 %2 minutes 57 seconds7
35Prisha47 %6 minutes 57 seconds7
36Arshnoor40 %1 minutes 36 seconds6
37Gargi40 %3 minutes 3 seconds6
38Saumyasingh40 %8 minutes 2 seconds6

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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