CHAPTER 6 : MONEY & BANKING

People have so many reasons to hold their money. Choose of the following situation to describe the reasons.

I. To pay clinic bills

II. To buy foods and drinks

III. To pay transportation services

IV. To make a profitable investment

• I and II only

• II and III only

• III and IV only

• All of the above

Calculate the value of M2

• RM122,055

• RM118,055

• RM120,555

• RM128,055

Compute the value of paper money if the coin amount is RM2,555

• RM5,000

• RM4,945

• RM3,445

• RM7,445

All of the options below are the components of quasi money EXCEPT

• Bank Negara certificate

• Negotiable certificate

• Fixed and savings deposits in other financial institutions

• Fixed and savings deposits in commercial bank

The main purpose of the Bank Negara Malaysia is to

• invest in property

• print money

• grant loans

• accept deposit from public

Which of the following option is the function of the central bank as a banker to commercial banks?

• Managing the national debt

• Control foreign exchange

• Policy maker for monetary policy

• Lender of the last resort

M1 money supply in Malaysia consists of

• coins, currency notes and cheques

• currency in circulations and saving deposits

• fixed deposit, saving deposits and negotiable certificates of deposits

• currency in circulation, saving deposit and time deposit

If Rose purchased a new computer and paid by credit card, she is using money as

• a store of value

• a measure of value

• a medium of exchange

• a standard of deferred payment

Money that can be directly used for transaction is

• near money

• broad money

• M1

• M2

Money is demanded for speculative motives in order to

• generate profit from the change in price of bonds and speculated change in interest

• overcome any uncertainty in the price of goods and services

• purchase goods and services that are difficult to obtain in the market

• avoid the risk of a drop in the value of money