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

MCQ Questions for Class 12 Economics Chapter 3 : Class 12 Chapter 3 “Money and Banking” MCQ Questions for Class 12 Economics with Answers PDF Free Download here according to the latest CBSE syllabus and NCERT curriculum.

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

MCQ Questions for Class 12 Economics Chapter 3 Money and Banking

Here CBSE RBSE and Other State Board NCERT Objective MCQ Questions of Class 12 Economics Chapter 3 “Money and Banking” with Answers Pdf will guide students to do a quick revision for all chapter.

Q1. What is the defect of the barter system?

(A) Lack of double coincidence of wants
(B) Difficulty in the measurement of value
(C) Difficulty in store of value
(D) All of these

(D) All of these


Q2. Which of the following is the credit money?

(A) Cheque and draft
(B) Promissory note
(C) Exchange note
(D) All of these

(D) All of these


Q3. Which among the following is the near money?

(A) Bonds
(B) Insurance policy
(C) Securities
(D) All of these

(D) All of these


Q4. Which of the following is the feature of money?

(A) General acceptability
(B) Homogeneous unit
(C) Liquid asset
(D) All of these

(D) All of these


Q5. In order to encourage investment in the economy, the Central Bank may __

(A) Reduce Cash Reserve Ratio
(B) Increase Cash Reserve Ratio
(C) Sell Government securities in the open market
(D) Increase Bank Rate

(A) Reduce Cash Reserve Ratio


Q6. Institution that accepts deposits for lending purpose is known as __

(A) Commercial Bank
(B) Central Bank
(C) Government
(D) Public

(A) Commercial Bank


Q7. Which of the following is the function of a commercial bank?

(A) Accepting deposits
(B) Credit creation
(C) Agency function
(D) All of these

(D) All of these


Q8. The central bank can increase the availability of credit by:

(A) Rasing repo rate
(B) Raising reverse repo rate
(C) Buying government securities
(D) Selling government securities

(D) Selling government securities


Q9. Giving permission to withdraw money by an amount more than deposited to is known as _

(A) Advance
(B) Overdraft
(C) Loan
(D) None of these

(B) Overdraft


Q10. What are the alternative measures of money supply in India?

(A) M1
(B) M2
(C) M3 and M4
(D) All of these

(D) All of these


Q11. Who circulates all mint and one rupee not in India?

(A) Ministry of Finance
(B) RBI
(C) Ministry of External Affairs
(D) State Government

(A) Ministry of Finance


Q12. Which of the following is the narrow measure of the money supply?

(A) M2
(B) M3
(C) M1
(D) M4

(C) M1


Q13. When was the minimum reserve system started in India?

(A) 1947
(B) 1948
(C) 1951
(D) 1957

(D) 1957


Q14. Which is the most liquid measure of the money supply?

(A) M4
(B) M3
(C) M2
(D) M1

(D) M1


Q15. High Powered Money includes:

(A) C + DD + OD
(B) C + R + OD
(C) C + R + TD
(D) C + DD + TD

(B) C + R + OD


Q16. Indian Monetary System is based on __

(A) Paper Standard
(B) Metallic Standard
(C) Gold Standard
(D) Credit Money Standard

(A) Paper Standard


Q17. Which of the following is the apex bank of India?

(A) RBI
(B) SBI
(C) SBP
(D) PNB

(A) RBI


Q18. Who has the right of note issue?

(A) Central Bank
(B) Commercial Bank
(C) Government
(D) Co-operative Bank

(A) Central Bank


Q19. Which of the following is the function of a Central bank?

(A) Issue of notes
(B) Banker to the Government and Banks
(C) Supply and control of money
(D) All of these

(D) All of these


Q20. The ratio of total deposits that a commercial bank has to keep with RBI is called:

(A) Statutory liquidity ratio
(B) Deposit ratio
(C) Cash reserve ratio
(D) Legal reserve ratio

(C) Cash reserve ratio


Q21. Demand deposits include

(A) Saving account deposits and fixed deposits
(B) Saving account deposits and current account deposits
(C) Current account deposits and fixed deposits
(D) All type of deposits

(B) Saving account deposits and current account deposits


Q22. What are the necessary conditions of the Barter System?

(a) Limited Needs
(b) Limited Exchange Area
(c) Economically Backward Society
(d) All the above

(d) All the above

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