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Money and Banking Test - 5

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Money and Banking Test - 5
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Weekly Quiz Competition
  • Question 1
    1 / -0

    The fraction of deposits is kept as Cash Reserves by the commercial banks with the

    Solution

    To maintain stablity in monetary sector. 

  • Question 2
    1 / -0

    The broad definition of money is based on

    Solution

    Broad money is less liquid. So  ,based on store of value function. 

  • Question 3
    1 / -0

    An economy based on barter system is also called as

    Solution

    Commodities are exchanged for commodities. 

  • Question 4
    1 / -0

    One of the secondary functions of money is

    Solution

    This function deserves secondary importance. 

  • Question 5
    1 / -0

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

    Solution

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

  • Question 6
    1 / -0

    The narrow definition of money is based on


    Solution

    Narrow money is most liquid. 

  • Question 7
    1 / -0

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

    Solution

    When central bank is the sole authority to print currency, it can easily maintain money supply. 

  • Question 8
    1 / -0

    Which one of the following is not a primary functions of money

    Solution

    If money is not stored, it will still be called money. 

  • Question 9
    1 / -0

    The broad definition of money is based on


    Solution

    Broad money is less liquid. So  ,based on store of value function. 

  • Question 10
    1 / -0

    Which one of the following is not a secondary function of money

    Solution

    Measure of value is a primary function of money. 

  • Question 11
    1 / -0

    Which one of the following is not a secondary functions of money


    Solution

    Medium of exchange is a primary function of money. 


  • Question 12
    1 / -0

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

    Solution

    Raising CRR leads to deficient aggregate demand. 

  • Question 13
    1 / -0

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

    Solution

    Reducing CRR leads to excess demand. 

  • Question 14
    1 / -0

    One of the functions of commercial l banks among the following is

    Solution

    Without accepting deposits ,credit creation is impossible. 

  • Question 15
    1 / -0

    The narrow definition of money is not based on

    Solution

    Narrow money is most liquid. So, is not stored. 


  • Question 16
    1 / -0

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


    Solution

    Doing so would discourage investment and lead to deficient aggregate demand via multipliar process. 

  • Question 17
    1 / -0

    The fraction of deposits kept as Cash Reserves by the commercial banks is called

    Solution

    It's a percentage of net demand and time liabilities of commercial banks to be kept with central bank .Moreover, time and demand liabilities comprise total deposits of commercial banks. 

  • Question 18
    1 / -0

    The fraction of deposits kept as Cash Reserves by the commercial banks with themselves is called


    Solution

    SLR is defined as the minimum percentage of net time and demand liabilities which commercial banks need to keep with themselves by law. 

  • Question 19
    1 / -0

    The fraction of deposits kept as Cash Reserves by the commercial banks is a


    Solution

    It's imposed by government. 

  • Question 20
    1 / -0

    The fraction of deposits kept as Cash Reserves by the commercial banks are also called as


    Solution

    LRR=SLR +CRR.Since, both SLR and CRR are imposed by central bank under law. 

  • Question 21
    1 / -0

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

    Solution

    Doing so would increase money supply leading to lower interest rates and further excess demand via multipliar process. 

  • Question 22
    1 / -0

    One of the functions of Central Bank among the following is


    Solution

    It's the only bank, issuing currency in the economy.

  • Question 23
    1 / -0

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

    Solution

    Doing so would decrease the amount borrowed and discourage investment leading to deficient aggregate demand. 

  • Question 24
    1 / -0

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


    Solution

    Doing so would increase the amount borrowed and encourage investment. Thus ,raising aggregate demand .  

  • Question 25
    1 / -0

    One of the primary functions of money is

    Solution

    This function acts as measuring rod of goods and services, which is paramount. 

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