Money and Credit

Which of the following statements are true?

(a) As per Indian law, apart from RBI, no other individual or organisation is allowed to issue currency.

(b) The law legalises the use of rupee as a medium of payment that cannot be refused in settling transactions in India

(c) No individual in India can legally refuse a payment made in rupees.

(d) All of the above are true.

• a

• b

• c

• d

A ………… is a paper instructing the bank to pay a specific amount from the person’s account to the person in whose name it has been issued?

(a) Deposit slip

(b) Withdrawal slip

(c) ATM facility

(d) Cheque

• a

• b

• c

• d

Which of the following is not a modern form of money?

(a) Paper notes

(b) Demand deposits

(c) Silver coins

(d) None of the above

• a

• b

• c

• d

Which among these is an essential feature of barter system?

(a) Money can easily exchange any commodity

(b) It is based on double co-incidence of wants

(c) It is generally accepted as a medium of exchange of goods with money

(d) It acts as a measure and store of value

• a

• b

• c

• d

Banks in India these days hold about _________ of their deposits as cash.

(a) 25 percent

(b) 20 percent

(c) 15 percent

(d) 5 percent

• a

• b

• c

• d

Which one of the following is a modem form of currency?

(a) Gold

(b) Silver

(c) Copper

(d) Paper notes

• a

• b

• c

• d

In which of the following systems exchange of goods is done without use of money?

(a) Credit system

(b) Barter system

(c) Banking system

(d) Collateral system

• a

• b

• c

• d

Banks use the major portion of the deposits to:

(a) Keep as reserve so that people may withdraw

(b) Meet their routine expenses

(c) Extend loans

(d) Meet renovation of bank

• a

• b

• c

• d

What percentage of their deposits is kept as cash by the banks in India?

(a) 25%

(b) 20%

(c) 15%

(d) 10%

• a

• b

• c

• d

What is the main source of income of a bank?

(a) Bank charges that the depositors pay for ; keeping their money safe is the main ; source of the bank’s income.

(b) The difference between what is charged from the borrowers and paid to the depositors is the main source of bank’s income.

(c) Banks earn huge amounts of money by investing the money of the depositors in various company shares.

(d) The Government of India gives huge amounts of money to the banks to help their smooth functioning.

• a

• b

• c

• d