Money and Banking online Test

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Money and Banking online Test - 10

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Weekly Quiz Competition

Question 1
1 / -0

The narrow definition of money is not based on

A
Medium of payment function

B
Both A & B

C
Cant’ say

D
Store of value function

Solution

Narrow money is most liquid. So, is not stored.
Question 2
1 / -0

The broad definition of money is not based on

A
Store of value function

B
Medium of payment function

C
Cant’ say

D
Both A & B

Solution

It's is least liquid form of money and is not used much for transactions.
Question 3
1 / -0

Which role of Central Bank makes it as the controller of money supply or credit

A
Issuing currency

B
Issuing only Rs.1000 denomination notes

C
Issuing only Rs.100 denomination notes

D
Issuing coins

Solution

When central bank is the sole authority to print currency, it can easily maintain money supply.
Question 4
1 / -0

One of the various qualitative instruments used by the central bank in during inflation is

A
Reduce margin requirements

B
Remove margin requirements

C
Fix margin requirements

D
Raise margin requirements

Solution

Doing so would decrease the amount borrowed and discourage investment leading to deficient aggregate demand.
Question 5
1 / -0

One of the various qualitative instruments used by the central bank in during deflation is

A
Raise margin requirements

B
Remove margin requirements

C
Reduce margin requirements

D
Fix margin requirements

Solution

Doing so would increase the amount borrowed and encourage investment. Thus ,raising aggregate demand .
Question 6
1 / -0

What is the currency deposit ratio (cdr)?

A
none of these

B
ratio of money held in demand drafts to that of money held in treasury bonds

C
ratio of money held by public in bank deposits to that of money held by public in currency

D
ratio of money held by the public in currency to that of money held in bank deposits

Solution

ratio of money held by the public in currency to that of money held in bank deposits
Question 7
1 / -0

What is the reserve deposit ration (rdr)?

A
the total proportion of money that commercial banks lend to the customers

B
the proportion of money RBI lends to commercial banks

C
none of these

D
the proportion of total deposits commercial banks keep as reserves

Solution

the proportion of total deposits commercial banks keep as reserves
Question 8
1 / -0

Selling government securities by the central bank in India during excess demand will be

A
Stabilisation

B
Deflationary

C
Inflationary

D
Destabilisation

Solution

Doing so would increase money supply leading to lower interest rates and further excess demand via multipliar process.
Question 9
1 / -0

Raising bank rate by the central bank in India during excess demand is

A
Deflationary

B
Destabilisation

C
Stabilisation

D
Inflationary

Solution

Doing so would discourage investment and lead to deficient aggregate demand via multipliar process.
Question 10
1 / -0

Raising CRR by the central bank in India during excess demand will be

A
Inflationary

B
Deflationary

C
Stabilisation

D
Destabilisation

Solution

Interest rate would increase leading to decrease in investment leading to reduction in aggregate demand.

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Re-Attempt Weekly Quiz Competition

Money and Banking online Test - 10

Result

Money and Banking online Test - 10

Score

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Rank

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SHARING IS CARING

Question 1

Medium of payment function

Both A & B

Cant’ say

Store of value function

Solution

Question 2

Store of value function

Medium of payment function

Cant’ say

Both A & B

Solution

Question 3

Issuing currency

Issuing only Rs.1000 denomination notes

Issuing only Rs.100 denomination notes

Issuing coins

Solution

Question 4

Reduce margin requirements

Remove margin requirements

Fix margin requirements

Raise margin requirements

Solution

Question 5

Raise margin requirements

Remove margin requirements

Reduce margin requirements

Fix margin requirements

Solution

Question 6

none of these

ratio of money held in demand drafts to that of money held in treasury bonds

ratio of money held by public in bank deposits to that of money held by public in currency

ratio of money held by the public in currency to that of money held in bank deposits

Solution

Question 7

the total proportion of money that commercial banks lend to the customers

the proportion of money RBI lends to commercial banks

none of these

the proportion of total deposits commercial banks keep as reserves

Solution

Question 8

Stabilisation

Deflationary

Inflationary

Destabilisation

Solution

Question 9

Deflationary

Destabilisation

Stabilisation

Inflationary

Solution

Question 10

Inflationary

Deflationary

Stabilisation

Destabilisation

Solution

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