Money and Banking Test

Question 1
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): M₁ is the least liquid measure of money supply.
Reason (R): M₁ includes the currency in circulation, demand deposits with the bank and other deposits with the RBI.

A
A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B
B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C
C. Assertion (A) is true but reason (R) is false.

D
D. Assertion (A) is false but reason (R) is true.

Question 2
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): Demand deposits are not legal tenders.
Reason (R): They are with the bank, so only can be used as a legal tender when cheques are issued for the transfer.

A
A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B
B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C
C. Assertion (A) is true but reason (R) is false.

D
D. Assertion (A) is false but reason (R) is true.

Question 3
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): M₄ is the least liquid measure of money supply.
Reason (R): M₄ is inclusive of all the money supply included in M₃ as well as the Total Deposits with the Post Office.

A
A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B
B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C
C. Assertion (A) is true but reason (R) is false.

D
D. Assertion (A) is false but reason (R) is true.

Question 4
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): Money is what money does.
Reason (R): Money facilitates exchange of goods and services.

A
A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B
B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C
C. Assertion (A) is true but reason (R) is false.

D
D. Assertion (A) is false but reason (R) is true.

Question 5
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): Central Bank as a banker to the government, works as a custodian of cash reserves.
Reason(R): The Central Bank acts as a clearinghouse for the transfer and settlement of mutual claims of commercial banks.

A
A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B
B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C
C. Assertion (A) is true but reason (R) is false.

D
D. Assertion (A) is false but reason (R) is true.

Question 6
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): Central bank as a banker to the banker to the government, works as a financial advisor.
Reason (R): Government borrows internally from banks and the general public.

A
A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B
B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C
C. Assertion (A) is true but reason (R) is false.

D
D. Assertion (A) is false but reason (R) is true.

Question 7
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): The currency notes do not carry as much value in them as is denominated, still have general acceptance.
Reason (R): Currency notes are backed by a legal promise from the central bank and central government of the country.

A
A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B
B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C
C. Assertion (A) is true but reason (R) is false.

D
D. Assertion (A) is false but reason (R) is true.

Question 8
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): Currency held by the public is a monetary liability of the central bank.
Reason (R): The Central bank controls credit, whereas commercial banks create credit with the currency held by the public.

A
A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B
B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C
C. Assertion (A) is true but reason (R) is false.

D
D. Assertion (A) is false but reason (R) is true.

Question 9
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): LRR is the fraction of deposits that are kept with the central bank as cash reserves.
Reason (R): The value of LRR is decided by the central bank.

A
Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B
Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C
Assertion (A) is true but reason (R) is false.

D
Assertion (A) is false but reason (R) is true.

Question 10
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Directions: In the following questions, a statement of assertion (A) is followed by a statement of reason (R). Mark the correct choice as:
Assertion (A): Money supply includes the least liquid measure of the Money supply.
Reason (R): Money supply includes the currency with public outside banks and demand deposits with banks.

A
Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B
Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C
Assertion (A) is true but reason (R) is false.

D
Assertion (A) is false but reason (R) is true.

Submit Test

Money and Banki...

Question 1

A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C. Assertion (A) is true but reason (R) is false.

D. Assertion (A) is false but reason (R) is true.

Question 2

A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C. Assertion (A) is true but reason (R) is false.

D. Assertion (A) is false but reason (R) is true.

Question 3

A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C. Assertion (A) is true but reason (R) is false.

D. Assertion (A) is false but reason (R) is true.

Question 4

A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C. Assertion (A) is true but reason (R) is false.

D. Assertion (A) is false but reason (R) is true.

Question 5

A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C. Assertion (A) is true but reason (R) is false.

D. Assertion (A) is false but reason (R) is true.

Question 6

A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C. Assertion (A) is true but reason (R) is false.

D. Assertion (A) is false but reason (R) is true.

Question 7

A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C. Assertion (A) is true but reason (R) is false.

D. Assertion (A) is false but reason (R) is true.

Question 8

A. Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

B. Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

C. Assertion (A) is true but reason (R) is false.

D. Assertion (A) is false but reason (R) is true.

Question 9

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

Question 10

Both assertion (A) and reason (R) are true and reason (R) is the correct explanation of assertion (A).

Both assertion (A) and reason (R) are true but reason (R) is not the correct explanation of assertion (A).

Assertion (A) is true but reason (R) is false.

Assertion (A) is false but reason (R) is true.

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