CBSE Class 12 Economics Money and Banking MCQs

Question :  Barter system refers to that system where in:

a) Goods are exchanged for goods

b) Goods are not exchanged at all

c) Goods are exchanged for domestic currency

d) Goods are exchanged for foreign currency

Answer :  Goods are exchanged for goods

Question :  Which of the following is related to barter system of exchange ?

a) Double coincidence of wants   

b) Common unit of value

c) Limited exchange 

d) Both (a) and (c)

Answer :  Both (a) and (c)

Question :  Out of the following , which is the primary function of money supply?

a) Store of value

b) Transfer of value

c) Measure of value

d) Bases of credit

Answer :  Measure of value

Question :  Which of the following is the adequate definition of money?

a) Any goods which is commonly used as a store of value

b) Any goods which is exchanged for gold at a fixed rate

c) Any goods which is acceptable to a bank

d) Any goods which is commonly accepted as a medium of exchange

Answer :  Any goods which is commonly accepted as a medium of exchange

Question :  Which of the following is the component of M₁ measure of money supply?

a) Time deposit

b) Bill of exchange

c) Treasury bill

d) None of these

Answer :  None of these

Question :  Full- bodied money is that money, whose money value and commodity value are:

a) Equal

b) Proportionately equal

c) Different

d) None of these

Answer :  Equal

Question :  Bank money is that money which is:

a) Printed by RBI

b) Printed by the government

c) Generated in the form of credit creation

d) None of these

Answer :  Generated in the form of credit creation

Question :  Which of the following system governs note issuing in India

a) Proportionate system     

b) Minimum reserve system

c) Fixed fiduciary  issue system

d) Simple deposit system 

Answer :  Minimum reserve system

Question :  In India there are four alternative measures of money supply M₁, M₂, M₃ and M₄ of these M_{1 =}

a) Currency with people

b) Currency with people + demand deposits

c) Currency with people +demand deposits + other deposits with the reserve bank

d) None of these

Answer :  Currency with people +demand deposits + other deposits with the reserve bank

Question :  Which of the following is not the function of commercial bank?

a) To accept deposits

b) To offer loans

c) To provide overdraft facility

d) To fix CRR

Answer :  To fix CRR

Question :  A commercial bank is a bank that:

a) Gives long-term loans

b) Creates credit

c) Gives short-term loans      

d) All of these

Answer :  All of these

Question :  Which of the following is not concerned with banking organization?

a) Bank rate

b) Fiscal deficit

c) Credit creation

d) Cash reserve ratio

Answer :  Fiscal deficit

Question :  Non- chequeable deposits are those:

a) Against which no cheque can be drawn at any time

b) Against which no money can be withdrawn

c) Which are called fixed deposit

d) All of these

Answer :  All of these

Question :  Credit cards issued by the banks:

a) Encourage Consumer Spending

b) Increase Aggregate Demand In the Economy

c) Both (a) and (b)

d) None of these

Answer :  Both (a) and (b)

Question :  Central bank is an apex bank of the country that:

a) Controls the entire banking system of the country

b) Issues currency

c) Acts as a banker to the government

d) All of these

Answer :  All of these

Question :  Credit control means:

a) Contraction of credit only

b) Extension of credit only

c) Extension and contraction of money supply

d) None of these

Answer :  Extension and contraction of money supply

Question :  Which of the following is not the instrument of credit control?

a) CRR

b) SLR

c) Repo rate    

d) Managed floating

Answer :  Managed floating

Question :  The minimum percentage of a bank’s total deposits which is required to be kept with the RBI is called:

a) CRR

b) Repo rate

c) SLR

d) Reverse Repo Rate

Answer :  CRR

Question :  Which of the following leads to increase in AD ?

a) Fall in imports

b) Increase in investment expenditure

c) Increase in government expenditure   

d) All of these

Answer :  All of these

Question :  Deficient or excess demand can be corrected through

a) Fiscal Policy

b) Monetary Policy

c) Both (a) and (b)   

d) None of these

Answer :  Both (a) and (b)