Money and Banking MCQ Questions for Class 12 Economics Chapter 3 with Answers

We have compiled the NCERT/CBSE chapter-wise Multiple Choice Class 12 Economics Chapter 3 Money and Banking with Answers by expert subject teacher for latest syllabus and examination. Prepare effectively for the exam taking the help of the Class 12 Economics Objective Questions PDF free of cost from here. Students also can take a free test of the Multiple Choice Questions of Money and Banking. Each question has four options followed by the right answer. Download the Economics Quiz Questions with Answers for Class 12 Pdf and prepare to help students understand the concept very well.

MCQ Questions for Class 12 Macroeconomics with Answers: Introductory Macroeconomics


Question1.

Initial deposits made by the people from their own resources are called

(i) time deposits
(ii) secondary deposits
(iii) primary deposits
(iv) term deposits

(iii) primary deposits


Question2.

Which of the following is the credit money?

(i) Cheque and draft
(ii) Promissory note
(iii) Exchange note
(iv) All of these

(iv) All of these


Question3.

Money supply includes _

(i) All deposits in bank
(ii) Only demand deposits in banks
(iii) Only time deposits in banks
(iv) Currency with the banks

(ii) Only demand deposits in banks


Question4.

Out of the following , which is the primary function of money supply?

(i) Store of value
(ii) Transfer of value
(iii) Measure of value
(iv) Bases of credit

(iii) Measure of value


Question5.

In order to encourage investment in the economy, the Central Bank may __

(i) Reduce Cash Reserve Ratio
(ii) Increase Cash Reserve Ratio
(iii) Sell Government securities in the open market
(iv) Increase Bank Rate

(i) Reduce Cash Reserve Ratio


Question6.

Institution that accepts deposits for lending purpose is known as __

(i) Commercial Bank
(ii) Central Bank
(iii) Government
(iv) Public

(i) Commercial Bank


Question7.

-is the primary function of money.

(i) transfer of value
(ii) medium of exchange
(iii) standard of deferred payment
(iv) store of value

(ii) medium of exchange


Question8.

Which of the following is the component of M1 measure of money supply?

(i) Time deposit
(ii) Bill of exchange
(iii) Treasury bill
(iv) None of these

(iv) None of these


Question9.

Banks are able to create credit many times more than initial deposits through

(i) secondary deposits
(ii) providing overdraft facilities
(iii) accepting deposits
(iv) advancing loans

(i) secondary deposits


Question10.

Which of the following is the function of a commercial bank?

(i) Accepting deposits
(ii) Credit creation
(iii) Agency function
(iv) All of these

(iv) All of these


Question11.

Limitation of barter system of exchange

(i) lack of unit of value
(ii) lack of store of value
(iii) lack of standard of deferred payments
(iv) all of these

(iv) all of these


Question12.

Bank money is that money which is:

(i) Printed by RBI
(ii) Printed by the government
(iii) Generated in the form of credit creation
(iv) None of these

(iii) Generated in the form of credit creation


Question13.

The ratio of total deposit that a commercial bank has to keep with the Reserve Bank of India is called

(i) Statutory Liquidity Ratio
(ii) Deposit Ratio
(iii) Cash Reserve Ratio
(iv) Legal Reserve Ratio

(iii) Cash Reserve Ratio


Question14.

Giving permission to withdraw money by an amount more than deposited to is known as _

(i) Advance
(ii) Overdraft
(iii) Loan
(iv) None of these

(ii) Overdraft


Question15.

Money supply is a __ concept.

(i) Flow
(ii) Stock
(iii) Variable
(iv) All of these

(ii) Stock


Question16.

Which of the following is not the function of commercial bank?

(i) To accept deposits
(ii) To offer loans
(iii) To provide overdraft facility
(iv) To fix CRR

(iv) To fix CRR


Question17.

_ is the main function of Central Bank.

(i) Notes issue
(ii) Credit creation
(iii) Accepting deposits from the public
(iv) Advancing loans to public

(i) Notes issue


Question18.

Who circulates all mint and one rupee not in India?

(i) Ministry of Finance
(ii) RBI
(iii) Ministry of External Affairs
(iv) State Government

(i) Ministry of Finance


Question19.

Who regulates money supply in India?

(i) Government of India
(ii) Reserve Bank of India
(iii) Planning Commission
(iv) NITI Aayog

(ii) Reserve Bank of India


Question20.

Which of the following is not concerned with banking organization?

(i) Bank rate
(ii) Fiscal deficit
(iii) Credit creation
(iv) Cash reserve ratio

(iv) Fiscal deficit


Question21.

When was the minimum reserve system started in India?

(i) 1947
(ii) 1948
(iii) 1951
(iv) 1957

(iv) 1957


Question22.

The creation of __ is called credit creation.

(i) time deposits
(ii) primary deposits
(iii) secondary deposits
(iv) none of these

(iii) secondary deposits


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