Money and Credit Test

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Money and Credit Test - 23

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Weekly Quiz Competition

Question 1
1 / -0

Arrange the following in order in which they appeared.
Use the code given below:
(i) Friedman's Quantity Theory of Money
(ii) Fisher's Equation of Exchange
(iii) Cambridge Equation of Exchange
(iv) Don Patinkins Theory of Money

A
(ii) (iii) (iv) (i)

B
(i) (ii) (iii) (iv)

C
(ii) (iii) (i) (iv)

D
(iii) (iv) (ii) (i)
Question 2
1 / -0

AML stands for ________________.

A
After Money Liability

B
Anti Money Laundering

C
Anti Management Liability

D
None of the above
Question 3
1 / -0

Select the correct statement/statements regarding 'numeraire' from the given list using the code given below:
1. It is a monetary unit for denominating international exchanges on a common basis.
2. Today the Special Drawing Rights (SDRs) of the IMF is accepted as the standard numeraire in the world.

A
Only $$1$$

B
Only $$2$$

C
Both $$1$$ and $$2$$

D
Neither $$1$$ nor $$2$$

Solution

The US dollar is presently being used as the numeraire for all international transactions and calculating the foreign reserves of the economies (it means that an economy may be maintaining its foreign currency. Reserves in many world currencies as per its use show its total volume in the US dollars). Similarly, all transactions of the IMF are also shown in it (including its SDRs).
Question 4
1 / -0

The price at which a market maker is prepared to sell (a currency) or lend (money) is called ___.

A
forward rate

B
sport rate

C
bid rate

D
offer rate

Solution

The price at which a market maker is prepared to sell a currency or lend money is offer rate.
It is the rate at which the market maker will sell the base currency to a customer/market user.
Question 5
1 / -0

Identify the correct chronological order of the following theories.
1. Cambridge version of quantity theory of money.
2. Fisher's version of quantity theory of money.
3. Tobin's theory of demand for money.
4. Baumol's theory of demand for inventory.

A
3, 4, 1, 2

B
2, 1, 4, 3

C
4, 1, 2, 3

D
1, 2, 3, 4

Solution

Quantity theory of money was developed by Simon New-comb, Alfred de Foville, Irving Fisher and Ludwing Von Mises in the latter 19th and early 20th century, Alfred Marshall, A.C. Pigou and J. M. Keynes (before he developed his own, eponymous school of thought) associated with Cambridge University, took a slightly different approach to the quantity theory, focusing on money demand instead of money supply. The Baumol-Tobin model is an money as developed independently by William Baumol (1952) and James Tobin(1956).
Question 6
1 / -0

In time value of money, nominal rate is ________________.

A
not shown on timeline

B
shown on timeline

C
multiplied on timeline

D
divided on timeline
Question 7
1 / -0

Which one of the following statement is incorrect about Reverse Mortgage?

A
It is a kind of loan through which one can get cash flow serially in return for pledging a property to a bank.

B
It is the conveyance of an asset by a borrower to a lender as security for a loan.

C
This scheme originated in the USA.

D
The eligibility criteria set by the RBI states that the person should be above $$60$$ years of age and own a home to avail this mortgage.

Solution

The policy was implemented in India in 2007 with the objective of providing financial security to the senior citizens who own a house. This functions just opposite to the case of 'mortgage' while borrowing money from bank to buy a housei.e., the beneficiary borrows a lump-sum loan by mortgaging his/her house and the loan is repaid in equal monthly installments (EMIs). In case the beneficiary dies before clearing the dues. his/her kins may repay the rest amount of the loan and own the house.
Question 8
1 / -0

The value of money varies.

A
Directly with the, interest rate

B
Directly with the price level

C
Directly with the volume of employment

D
Inversely with the price level

Solution

The variation in the value of money is always accompanied by the opposite variation in the price of commodities and services, which means the value of money varies inversely with the price level.
Vm$$=1/p$$ (where Vm denotes the value of money and p stands for price level).
Question 9
1 / -0

Which of the following are not the limitations of barter exchange?

A
Double coincidence of wants

B
legal acceptability

C
Store of value

D
Standard of deferred payments

Solution

Legal acceptability was not a limitation of barter exchange. Hence, option B is correct answer.
Question 10
1 / -0

The oldest stock exchange of India is:

A
Ahmedabad Stock Exchange

B
Bombay Stock Exchange

C
Bangalore Stock Exchange

D
Hyderabad Stock Exchange

Solution

The Bombay Stock Exchange is the oldest stock exchange in Asia. Its history dates back to 1855 when 22 stockbrokers would gather under banyan trees in front of Mumbai's Town Hall.
The location of these meetings changed many times to accommodate an increasing number of brokers.

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Money and Credit Test - 23

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Money and Credit Test - 23

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SHARING IS CARING

Question 1

(ii) (iii) (iv) (i)

(i) (ii) (iii) (iv)

(ii) (iii) (i) (iv)

(iii) (iv) (ii) (i)

Question 2

After Money Liability

Anti Money Laundering

Anti Management Liability

None of the above

Question 3

Only $$1$$

Only $$2$$

Both $$1$$ and $$2$$

Neither $$1$$ nor $$2$$

Solution

Question 4

forward rate

sport rate

bid rate

offer rate

Solution

Question 5

3, 4, 1, 2

2, 1, 4, 3

4, 1, 2, 3

1, 2, 3, 4

Solution

Question 6

not shown on timeline

shown on timeline

multiplied on timeline

divided on timeline

Question 7

It is a kind of loan through which one can get cash flow serially in return for pledging a property to a bank.

It is the conveyance of an asset by a borrower to a lender as security for a loan.

This scheme originated in the USA.

The eligibility criteria set by the RBI states that the person should be above $$60$$ years of age and own a home to avail this mortgage.

Solution

Question 8

Directly with the, interest rate

Directly with the price level

Directly with the volume of employment

Inversely with the price level

Solution

Question 9

Double coincidence of wants

legal acceptability

Store of value

Standard of deferred payments

Solution

Question 10

Ahmedabad Stock Exchange

Bombay Stock Exchange

Bangalore Stock Exchange

Hyderabad Stock Exchange

Solution

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