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ECONOMICS

Total questions: 40

Worksheet time: 21mins

Name
Class
Date
1.

............. is the rate at which commercial banks borrow from central bank in emergency

a)

CRR

b)

SLR

c)

Bank rate

d)

Reverse repo rate

2.

........... is the ratio of deposits which bank keep with the central bank

a)

CRR

b)

SLR

c)

Bank rate

d)

Reverse repo rate

3.

.......... is the rate at which commercial banks borrow short term funds from the central bank by selling their financial securities to the central bank

a)

CRR

b)

SLR

c)

Bank rate

d)

Repo rate

4.

Demand deposit created by the commercial bank are called

a)

High powered money

b)

Money

c)

Bank money

d)

Time deposit

5.

Which of the following is not a function of central bank

a)

Banker's supervisor

b)

Lender of last resort

c)

Money creation

d)

Controller of credit

6.

The currency created by the central bank is called

a)

High powered money

b)

Money

c)

Bank money

d)

Money supply

7.

.......... are called legal tenders

a)

Demand deposit

b)

Time deposits

c)

Inter-bank deposit

d)

currency notes and coins

8.

Deposit creation process comes to an end when

a)

fresh deposit with bank become zero

b)

LRR become zero

c)

money multiplier becomes zero

d)

total reserves equal initial deposits

9.

In case of credit money

a)

money value=commodity value

b)

money value>commodity value

c)

money value<commodity value

d)

none of these

10.

The concept of global economy has come into existence due to

a)

store of value

b)

transfer of value

c)

measure of value

d)

none of these

11.

Which of the following system is followed by RBI for issuing currency?

a)

Proportionate system

b)

Simple deposit system

c)

Minimum reserve system

d)

Fixed fiduciary issue system

12.

............is the rate at which the central bank borrow funds from commercial bank

a)

CRR

b)

SLR

c)

Bank rate

d)

Reverse repo rate

13.

Money is the most liquid of all the asset because

a)

it is a medium of exchange

b)

it is an unit of account

c)

it act as a store of value

d)

it is a standard of deferred payment

14.

which of the following agency is responsible for issuing Rs 1 currency note in India?

a)

RBI

b)

Ministry of commerce

c)

Ministry of finance

d)

Niti aayog

15.

What is the Cash Reserve Ratio (CRR)?

a)

the fraction of the deposits that commercial banks lend to the customers

b)

the fraction of the deposits that RBI must keep with commercial banks

c)

the fraction of the deposits that commercial banks must keep with RBI

16.

What possess general acceptability?

a)

Bank draft

b)

Money

c)

Bill of exchange

17.

Which bank enjoys monopoly power of Note issue?

a)

NABARD

b)

Commercial Bank

c)

Central Bank

18.

What is the name of Central Bank in India?

a)

SBI

b)

RBI

c)

PNB

19.

Money is a generally acceptable medium of

(a)  

20.

The main types of financial institutions in the market money are

(a)  

21.

Any good use as money must be hard wearing. This characteristics is called

(a)  

22.

Banks accept deposits of money and saving from their customers. They attract it by paying customers . . .

(a)  

23.

The centre of the banking systems in most economies is the

(a)  

24.

The central bank will normally have the exclusive right to print and issue

(a)  

25.

The card that we can used to make payments and it allow the holder up to a month or longer to pay for the purchase is called

(a)  

26.

Institution that accepts deposits for lending purpose is known as __________

a)

Commercial Bank

b)

Central Bank

c)

Government

d)

Public

27.

Which of the following is the apex bank of India?

a)

SBI

b)

RBI

c)

HDFC

d)

PNB

28.

Which one is the Bank of the Public?

a)

Commercial Bank

b)

Central Bank

c)

Both (a) and (b)

d)

None of the above

29.

Credit Multiplier is:

a)

1/CRR

b)

Cash X 1/CRR

c)

Cash x CRR

d)

None of these

30.

anything that people will accept as payment for goods and services

a)

money

b)

barter

31.

True or False: An increase in the Money Supply decreases interest rates, which increases consumption & investment, which increases aggregate demand.

a)

True

b)

False

32.
All of the following are services provided by banks and other financial institutions EXCEPT
a)
storing and saving money.
b)
paying interest.
c)
increasing the amount of money in circulation.
d)
providing mortgages.
33.

Barter refers to the direct exchange of one good and services to another goods and services.

a)

TRUE

b)

FALSE

34.

Central bank is owned and controlled by government

a)

TRUE

b)

FALSE

35.

Commercial bank are primary financial depositary institution where the government will keep their money

a)

TRUE

b)

FALSE

36.
Which of the following statements describes a function of money?
I. Money is a medium of exchange.
II. Money is a store of value.
III. Money is a unit of account.
IV. Money is a factor of production.
a)
I and IV only.
b)
I, II and IV only.
c)
II, III and IV only.
d)
I, III, and IV only.
37.
Assume that the reserve requirement is 20 percent, but banks voluntarily keep some excess reserves.  A $1 million increase in new reserves will result in
a)
an increase in the money supply of $5 million
b)
an increase in the money supply of less than $5 million
c)
a decrease in the money supply of $5 million
d)
a decrease in the money supply of more than $5 million
38.
Penny is an artist, and John is a carpenter. Penny agrees to paint a portrait of John’s family in exchange for a handmade table created by John. How do Penny and John pay for their goods in their transaction? 
a)
using a store of value
b)
through credit
c)
through bartering
d)
with currency
39.

Checks are not money because they

a)

can bounce when there are not enough funds to cash them.

b)

are just instruments to transfer money between banks.

c)

are not always accepted when trying to purchase goods or services.

d)

are not issued by the government.

e)

are not guaranteed by banks.

40.

Credit cards are:

i. a generally accepted form of payment and therefore part of M1.

ii. are included in M1 because you write a check to pay your monthly bill.

iii. a means of borrowing money.

a)

i only

b)

i and iii

c)

ii only

d)

i and ii

e)

iii only

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