CBSE Questions for Class 12 Commerce Economics Money And Banking Quiz 7 - MCQExams.com

Money market mutual funds ________.
  • enable individuals and small businesses to invest indirectly in money-market instruments
  • are available only to high net-worth individuals
  • are used in acquiring and placing mortgages
  • are mostly tradable on stock exchange
Money acts as a means of calculating relative prices of goods & services.
  • True
  • False
Central Bank's dealings are generally with ________.
  • Government
  • State banks
  • Other financial institutions
  • All of the above
To check the accuracy of index by shifting the base year, which test is used ________________.
  • Circular test
  • Time reversal test
  • Unit test
  • None
What functions are performed by money?
  • Served as a medium of exchange
  • Common measure of value
  • Store of value
  • All the above
The money market is a market for __________ funds which deals in monetary assets whose period of maturity is upto one year.
  • short-term
  • long-term
  • medium-term
  • nano-term
Which of the following is the main function of money according to modern economists ?
  • Medium of exchange
  • Common measure of value
  • Store of value
  • All of the above
The bank are required to maintain a certain ratio between their cash in hand and total assets which is called _________.
  • CLR (Cash Liquidity Reserve)
  • SLR (Statutory Liquidity Ratio)
  • SBR (Statutory Bank Ratio)
  • CBR (Central Bank Reserve)
Broadly speaking, a Central Bank has which of the following objectives?
  • Monetary stability
  • Price stability and issue of currency
  • Maintenance of international value of nation's currency
  • All of above
The rate of economic growth is _______ proportional to the rate of growth of capital formation.
  • inversely
  • directly
  • constant
  • none of the above
The depository receipts denominated in US dollars are known as ______________.
  • Global Depository Receipts
  • American Depository Receipts
  • Foreign Currency Convertible Bonds
  • None of the above
FCCB's are very similar to the _________ debentures issued in India.
  • Secured
  • Unsecured
  • First
  • Convertible
We read in the newspaper that the foreign direct investment are preferred over the capital inflow. In this context, please consider the following.
  Which statement is more suitable for this statement ?
  • FDI brings in the latest technology
  • FDI does not involve large outflow
  • FDI improves efficiency of the economy
  • None of the above
The depository receipts issued by a company in the USA are known as____________.
  • Global Depository Receipts
  • American Depository Receipts
  • Foreign Currency Convertible Bonds
  • All of the above
All of the following are essentials of a valid acceptance of an instrument, except _____.
  • must be conditional.
  • signed by drawee or his agent.
  • accepted must appear on the holder.
  • accepted of valid Acceptance.
According to Negotiable Act, $$1881$$, which of the following refers to a promissory note, bill of exchange or cheque payable either to order or to bearer?
  • Agreement
  • Contract
  • Negotiable Instrument
  • Act
A person is considered the holder of Negotiable Instruments if _________.
  • his name appears on an instrument
  • he is in possession of the bearer instrument
  • he is entitled to receive or recover the amount due on the instrument
  • all of the above.
The FCCB's are issued in a foreign currency and carry a ________ interest rate which is ________ than the rate of any other similar non-convertible debt instrument.
  • fixed, higher
  • fixed, lower
  • fluctuating, lower
  • fluctuating, higher
Which of the following is a financial instrument used in international capital market?
  • Global Depository Receipts
  • American Depository Receipts
  • Foreign Currency Convertible Bonds
  • All of the above
As a measure of value money provides
  • Its holder with perfect liquidity
  • Its fixed return in future
  • A common denominator for determining value of goods
  • A mechanism for allocating resources and distributing output
Money market mutual funds ____________________________.
  • Enable individuals and small business to invest indirectly in money-market instruments
  • Are available only to high net-worth individuals
  • Highly liquid and short term investment vehicle
  • Are mostly tradable on stock exchange
The practice of creating a full-fledged central bank so as to take charge of the existing financial system got an impetus by the recommendations made by the International Financial Conference held at Brussels in ________.
  • 1910
  • 1920
  • 1930
  • 1940
The limitations on credit creation by banks may be considered in respect to factors such as ________.
  • the capacity of banks to create credit
  • the willingness of banks to create credit
  • demand for credit in the market
  • all of above
With the help of cash reserve deposited by commercial banks with Central bank, commercial banks can _______________.
  • Increase their credit in the market
  • A cash reserve ratio can be formed
  • Both A and B
  • None of the above
CRR is the ______________.
  • Rate of interest changed by commercial bank from business browsers
  • Amount of reserved the commercial banks are required to keep with Central bank
  • Rate of interest banks pays to the depositor
  • None of the above
Central Bank acts as a custodian of the cash preserves of commercial banks which means it  ______________.
  • acts as a lender of last resort
  • as clearing agent
  • maintains the cash reserves of the commercial banks
  • none of the above
Liquidity of asset is dependent on __________.
  • the term of amatively of the asset
  • existence of organized secondary Markets
  • both a & b
  • none of the above
Bank rates are the rate at which ____________.
  • Central bank changes from all commercial rates regarding the deposit made by the commercial banks
  • Rates at which central bank gives credit to commercial banks
  • Rate at which commercial bank gives loan to browsers
  • None of the above
When the liquidity trap occurs the demand for money.
  • Is perfectly interest elastic
  • Is perfectly interest inelastic
  • Means that an increase in money supply leads to a fall in the interest rate
  • Means that an increase in the money supply leads to an increase in the interest rate
SLR is the _________.
  • amount of Reserve the commercial bank is required to keep with central bank
  • percentage of total customers deposit that commercial bank one required to keep with themselves
  • percentage of total deposit that commercial bank is themselves
  • total cash & gold that a bank has
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