CBSE Questions for Class 12 Commerce Economics Money And Banking Quiz 1 - MCQExams.com

The Central Bank of the country also acts as a banker to the government which normally involves _______.
  • providing ordinary banking services to the government
  • being a public debt agent and underwriter to the government
  • being an advisor
  • all of above
When more than one bank is allowing credit facilities to one party in coordination with each other under a formal arrangement, the arrangement is generally known as _________.
  • participation
  • consortium
  • syndication
  • multiple banking
Capital market means _____________.
  • Mutual Funds
  • Money Market
  • Securities Market
  • Banking Business
________imply deliberate direct sales and purchases of securities and bills in the market by the Central Bank on its own initiative to control the volume of credit. 
  • Bank rate policy
  • Variable Cash Reserve
  • Open market operations
  • Federal reserve ratio
Which one of the following is not instrument of selective credit control in India ________.
  • regulation of consumer credit
  • rationing of credit
  • margin requirements
  • variable cash reserve ratios
Which of the following are included in the functions of the Central bank?
(i) Narrowing the export- import gap
(ii) Issuing of notes
(iii) Acting as the Government's bank
(iv) Acting as the commercial bank's banker
  • (i), (ii)
  • (ii), (iii)
  • (ii), (iii), (iv)
  • (i), (ii), (iii), (iv)
The principal function of a Central bank is __________.
  • the provision of assistance to industry and commerce
  • the provision of assistance to the export trade
  • the carrying out of the country's monetary policy
  • the maximising of profit for its shareholders
The Statutory Liquidity Ratio(SLR) is _________.
  • amount of cash kept by a bank with the RBI
  • amount of gold and securities that it keeps with itself
  • amount of deposits with the other banks minus deposits of the other banks with the bank
  • amount of cash, gold unencumbered, approved securities with a bank and its deposits with the other banks minus deposits of the other banks with this bank
In June 2003, i.e. post-reform period, CRR was 15%, which gradually dropped from this peak to _________ by Sep, 2012.
  • 12%
  • 10%
  • 8%
  • 4.5%
A vital function of money is its ability to provide a standard for __________.
  • difference in consumer's goods
  • marginal utility
  • deferred payments
  • consumer's preference
Bank money takes the form of _________.
  • bank deposits
  • paper currency notes
  • security
  • equity shares
The chief function of money is that of __________.
  • a medium of exchange
  • a reserve base for credit creation
  • providing liquidity
  • none of the above
During the period of prosperity, credit creation is ___________.
  • small
  • heavy
  • unchanged
  • none of the above
Margin money is a part of __________.
  • income policy
  • rice policy
  • credit policy
  • monetary policy
In period of depression, credit creation is ________.
  • small
  • heavy
  • unchanged
  • none of the above
Money supply is a ___________.
  • flow concept
  • stock concept
  • both (a) and (b)
  • none of the above
Increase in export leads to ________.
  • increase in money supply
  • decrease in money supply
  • constant money supply
  • indeterminate
Narrow definition of money is ______.
  • $${M}_{1}$$
  • $${M}_{2}$$
  • $${M}_{3}$$
  • $${M}_{4}$$
Which of the following is the important function of money?
  • Money must be legal lender
  • Money must facilitate exchange if it is to fulfill its purpose
  • A government must exist for money to exist
  • None of the above
Which of the following will not come under narrow money?
  • Currency in circulation
  • Demand deposit
  • Time deposit
  • None of the above
Cash which has to be deposited with central bank is called __________.
  • statutory liquidity ratio
  • cash reserve ratio
  • credit ratio
  • investment ratio
According to Negotiable Instrument Act $$1881$$, which of the following is not the type of promissory note?
  • A promise to pay a certain sum of money to a person.
  • A promise to pay a certain sum of money to the order.
  • A promise to pay the bearer.
  • A promise to pay a certain sum of money at some time.
Promissory is invariably _______.
  • In writing.
  • Definite.
  • Unconditional.
  • All the above.
The Central Bank can increase the demand deposit component of the money supply by ____________.
  • increasing reserve requirements or decreasing the volume of reserves
  • lowering reserve requirements or increasing the volume of reserves
  • lowering reserve requirements or decreasing the volume of reserves
  • none of the above
Why was International Monetary Fund established?
  • To maintain peace and security to secure international monetary cooperation, to stabilize currency exchange rates, and to expand international liquidity.
  •  to secure international monetary cooperation, to stabilize currency exchange rates, and to expand international liquidity.

  • To implement trade agreements
  • To take decision regarding misery and poverty of western countries
A partner of a trading or non trading firm signs a Negotiable instrument liability incurs in ______.
  • the name of the firm.
  • in the name of partner.
  • both a & b.
  • none of the above.
Everything mentioned below is required to make the endorsement complete, EXCEPT ________.
  • The holder signs on the face or back of the instrument.
  • The instrument is delivered to the endorsee.
  • It is sighed and delivered with intention of vesting of the endorsee with the rights of the holder.
  • It is sighed and delivered with the intention of vesting the endorsee with the duties of the holder.
Central banking functions in India are performed by the ___________.
  • Central Bank of India
  • Indian Overseas Bank
  • State bank of India
  • Reserve Bank of India
For an endorsement to be called as Restrictive endorsement, it should satisfy the following conditions _______.
  • If the endorser signs his name only.
  • If the endorser signs a direction to pay the amount mentioned in the instrument to or to the order of a specified person.
  • If the endorser restricts or excludes the right to further negotiate the instrument.
  • If the endorser purports to transfer to the endorsee only a part of the amount payable.
According to Negotiable Act, $$1881$$, which of the following refer to an instrument in writing (not being a banknote or a currency note) containing unconditional undertaking, signed by the maker to pay or demand or at a fixed or determinable future time or the bearer of the instrument?
  • Promissory note
  • Bill of exchange
  • Cheque
  • Bearer debentures
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