Economics Test

Result

Economics Test - 22

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Weekly Quiz Competition

Question 1
5 / -1

Which of following measures of money supply is considered as monetary base?

A
M₁

B
M₂

C
M₃

D
M₄

Solution

M₃ is the benchmark currency measure used to control the money supply in the economy.
Question 2
5 / -1

Identify the incorrect statement from given below.

A
Present currency can work as money as it is a legal tender.

B
Coins held by the public are limited legal tender.

C
Central bank prints currency in India.

D
Central bankdo not deal with general public.

Solution

Central Bank in India just issue the currency and not prints it.
Question 3
5 / -1

Choose the correct statement from given below.

A
Commercial banks create credit out of primary deposits.

B
Money multiplier is directly related to legal reserve ratio.

C
Central bank of the country is not authorised to maintain foreign exchange reserve.

D
All of the above

Solution

Commercial banks create currency out of the total amount deposit that they receive from the customers.
Question 4
5 / -1

Dear money policy of central bank, which is used to keep the growth steady and in-line with other economic factors, refers to

A
Tighten the money supply in the economy

B
Ease the money supply in the economy

C
Allow commercial banks to work under less strict environment

D
Both (b) and (c)

Solution

Dear money policy is the one where central bank becomes strict in supplying the currency in the economy.
Question 5
5 / -1

India legal reserve ratio is set by the commercial banks.

A
True

B
False

C
Partially true

D
Can't say

Solution

Central bank of the country sets both cash reserve ratio and statutory reserve ratio.
Question 6
5 / -1

Which of the following systems is followed by Reserve Bank of India for issuing currency?

A
Minimum reserve system

B
Proportionate system

C
Fixed fiduciary issue system

D
Simple deposit system

Solution

Minimum reserve system is the one in which Central Bank get any amount of current printed against a minimum amount reserve.
Question 7
5 / -1

Which of the following reserves is kept with the commercial banks?

A
Cash Reserve Ratio

B
Statuary Liquidity Ratio

C
Both (a) and (b)

D
Neither (a) nor (b)

Solution

SLR is the fraction of total deposit that each commercial bank must reserve with themselves in liquid assets.
Question 8
5 / -1

Central Bank prints currency in the country.

A
True

B
False

C
Partially true

D
Can't say

Solution

Central Bank don’t directly print currency in the country, it gets it printed by the subsidies of RBI.
Question 9
5 / -1

Who regulates money supply?

A
Government of India

B
Reserve Bank of India

C
Commercial Bank

D
Planning Commission

Solution

RBI has the sole authority of issuing the currency (regulating the money supply) in the economy.
Question 10
5 / -1

The Central Bank is the sole supplier of money in an economy.

A
True

B
False

C
Partially true

D
Can't say

Solution

The central bank, commercial banks and the government are the suppliers of money in an economy.

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Re-Attempt Weekly Quiz Competition

Economics Test - 22

Result

Economics Test - 22

Score

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Rank

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SHARING IS CARING

Question 1

M1

M2

M3

M4

Solution

Question 2

Present currency can work as money as it is a legal tender.

Coins held by the public are limited legal tender.

Central bank prints currency in India.

Central bankdo not deal with general public.

Solution

Question 3

Commercial banks create credit out of primary deposits.

Money multiplier is directly related to legal reserve ratio.

Central bank of the country is not authorised to maintain foreign exchange reserve.

All of the above

Solution

Question 4

Tighten the money supply in the economy

Ease the money supply in the economy

Allow commercial banks to work under less strict environment

Both (b) and (c)

Solution

Question 5

True

False

Partially true

Can't say

Solution

Question 6

Minimum reserve system

Proportionate system

Fixed fiduciary issue system

Simple deposit system

Solution

Question 7

Cash Reserve Ratio

Statuary Liquidity Ratio

Both (a) and (b)

Neither (a) nor (b)

Solution

Question 8

True

False

Partially true

Can't say

Solution

Question 9

Government of India

Reserve Bank of India

Commercial Bank

Planning Commission

Solution

Question 10

True

False

Partially true

Can't say

Solution

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Question Analysis

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M₁

M₂

M₃

M₄