monetary Economics - 2025

Which of the following is NOT a component of the money supply?

• 1. a) Currency in circulation
     

• Demand Deposit

• 1. c) Government bond

• Saving Deposit

1. Which of the following factors influences the supply of money?
   
   
   
   

• 1. a) Central bank policies

• 1. b) Public demand for cash

• 1. c) Reserve requirements of banks

• 1. d) All of the above

1. The money multiplier effect is mainly determined by which of the following?
   
   

• 1. a) Interest rates

• 1. b) Reserve ratio

• 1. c) Inflation rate

• 1. d) GDP growth

1. What happens to the money supply when the central bank increases the reserve requirement?

• a) It increases

• b) It decreases

• c) It remains unchanged

• d) It fluctuates randomly

1. Which institution primarily regulates the supply of money in an economy?
   
   
   
   

• 1. a) Commercial banks

• 1. b) Ministry of Finance

• 1. c) Central bank

• 1. d) Stock exchange

The money market deals with long-term financial instruments, while the capital market deals with short-term financial instruments. State true or false

(a)  

The capital market plays a crucial role in economic development by providing funds for investment in infrastructure and industry.



(a)  

Treasury bills, commercial papers, and certificates of deposit are commonly traded in the money market.



(a)  

The (a)   market provides short-term funds for liquidity management and working capital needs.

The primary function of the capital market is to facilitate the mobilization of (a)   for long-term investment.