Money and Banking Class 12 MCQ. We covered all the Money and Banking Class 12 MCQ in this post for free so that you can practice well for the exam.
Install our MCQTUBE Android app from the Google Play Store and prepare for any competitive government exams for free.
These types of competitive MCQs appear in the exams like UPSC, State PCS, CDS, NDA, Assistant Commandant, SSC, Railway, Bank, Delhi Police, UPSSC, and other Competitive Examinations, etc. We created all the competitive exam MCQs into several small posts on our website for your convenience.
You will get their respective links in the related posts section provided below.
Related Posts:
- MCQ on Emergency Provisions
- Local Self Government Urban Class 9 ICSE
- Local Self Government Rural Class 9 ICSE
MCQ on Money and Banking for Class 12 Students
Which one of the following pairs is correctly matched?
(a) M0- Reserve Money
(b) M1-Broad Money
(c) M2 – Narrow Money
(d) None of the above
Option a – M0- Reserve Money
Foreign currency which has a tendency for quick migration is called
(a) Hot currency
(b) Gold currency
(c) Soft currency
(d) Hard currency
Option a – Hot currency
Which one among the following is the globally traded currency that can serve as a reliable and stable store of value?
(a) Soft currency
(b) Broad currency
(c) Local currency
(d) Hard currency
Option d – Hard currency
Which one among the following is correct about the money whose value comes from a commodity out of which it is made?
(a) Fiat money
(b) Commodity money
(c) Near money
(d) Electronic money
Option b – Commodity money
Which of the following is the correct definition of Hot Money?
(a) This is the fund that is dumped into a country to get the advantage of a favorable interest rate and hence bring high returns.
(b) This is the fund that is provided by a bank in US Dollars at very short notice at a very high rate of interest and for a longer period of repayment.
(c) This is the fund that is pushed into the market through Hawala or some other such illegal method and is sometimes referred to also as Black money.
(d) Both (a) and (c)
Option a – This is the fund that is dumped into a country to get the advantage of a favorable interest rate and hence bring high returns
Consider the following. I. Currency in circulation. II. Banker’s deposits with the RBI. III. Call/term funding from financial institutions. IV. ‘Other’ deposits with the RBI. Which of the components given above is/are included in the calculation of Reserve Money in India?
(a) I and II
(b) II, III, and IV
(c) I, II and
(d) Only Il
Option b – II, III, and IV
Which of the following measures would result in an increase in the money supply in the economy? I. Purchase of government securities from the public by the Central Bank. II. Deposit of currency in commercial banks by the public. III. Borrowing by the government from the Central Bank. IV. Sale of government securities to the public by the Central Bank. Select the correct answer using the codes given below.
(a) Only I
(b) II and IV
(c) I and III
(d) II, III, and IV
Option c – I and III
Legal Tender Money refers to
(a) Currency notes
(b) Bills of exchange
(c) Cheques
(d) Drafts
Option a – Currency notes
1 note released in the country and it bears the signature of
(a) Finance Secretary
(b) RBI Governor
(c) Prime Minister
(d) Speaker
Option a – Finance Secretary
Demonetization of 500 and 1000 currency notes was announced on
(a) 8th November 2016
(b) 1st January 2017
(c) 15th August 2016
(d) 31st March 2017
Option a – 8th November 2016
Consider the following elements. I. Broad Money (M3) II. All deposits with Post Office Savings Banks. III. National Savings Certificates Which of the elements given above are the parts of the M4-Money Supply in the Indian Economy?
(a) I and II
(b) I and III
(c) II and III
(d) All of these
Option a – I and II
With reference to Fiat Money, consider the following statements. I. It is the money declared by a government to be legal tender. II. It is money without intrinsic value. III. It is state-issued money that is neither legally convertible to any other thing, nor fixed value in terms of any objective standard. Which of the statements given above is/are correct?
(a) I and II
(b) Only I
(c) Only Il
(d) All of the above
Option d – All of the above
Which of the following is/are examples of ‘Near Money’? I. Treasury bill II. Credit card III. Savings accounts and small-time deposits. IV. Retail money market mutual funds. Select the correct answer using the codes given below.
(a) Only I
(b) Only Il
(c) I, II, and III
(d) I, III, and IV
Option d – I, III, and IV
Consider the following. I. New Broad Money (NM3) II. New Narrow Money III. All deposits with the Post office savings banks IV. National Savings Certificates Which of the components given above are correctly included in the Liquidity Aggregates in the Indian Economy?
(a) I, II, III and IV
(b) II and III
(c) I and III
(d) II and IV
Option c – I and III
Which one among the following is the source of the Reserve Money in India?
(a) Net foreign exchange assets of RBI.
(b) Governments’ currency liabilities to the public.
(c) Net non-monetary liabilities of the RBI.
(d) All of the above
Option d – All of the above
The money multiplier in an economy increases with which one of the following?
(a) Increase in the cash reserve ratio.
(b) Increase in the banking habit of the population.
(c) Increase in the statutory liquidity ratio.
(d) Increase in the population of the country.
Option b – Increase in the banking habit of the population
Multipliers will be lower with which one of the following?
(a) High marginal propensity to consume.
(b) Low marginal propensity to consume.
(c) High marginal propensity to invest.
(d) Low marginal propensity to save.
Option b – Low marginal propensity to consume
The higher rate of expansion in currency with the public and reserves as compared to that in deposits in an economy leads to
(a) the money multiplier remaining unchanged.
(b) increases at the first then decrease later on.
(c) an increase in the money multiplier.
(d) a decrease in the money multiplier.
Option d – a decrease in the money multiplier
Which one of the following is the major component of the money supply in the Indian Economy?
(a) Currency component
(b) Deposit component
(c) Treasury bills with the public
(d) Both (a) and (b)
Option d – Both (a) and (b)
If you withdraw 1,00,000 in cash from your Demand Deposit Account at your bank, the immediate effect on aggregate money supply in the economy will be
(a) to reduce it by ₹ 1,00,000.
(b) to increase it by 1,00,000.
(c) to increase it by more than 1,00,000
(d) to leave it unchanged.
Option d – to leave it unchanged
Which one of the following money supplies is also known as Narrow Money in the Indian economy?
(a) M1
(b) M2
(c) M3
(d) M4
Option a – M1
Which one of the following agencies of the Indian Government publishes the Narrow Money (M1) and Broad Money (M3) on fortnightly basis?
(a) State Bank of India
(b) Security Exchange Board of India
(c) Reserve Bank of India
(d) Central Statistical Organisation
Option c – Reserve Bank of India
Which one of the following money supplies in the Indian economy consists of the total post office savings?
(a) M1
(b) M2
(c) M3
(d) M4
Option d – M4
The Reserve Bank of India defines Narrow Money as
(a) CU (currency notes + coins) + DD (net demand deposits held by commercial banks).
(b) CU+DD+ saving deposits with post office savings banks.
(c) CU+DD+ net time deposits of commercial banks.
(d) CU+DD+ net time deposits of commercial banks + total deposits of post offices.
Option a – CU (currency notes + coins) + DD (net demand deposits held by commercial banks)
Which one among the following is the total amount of money available in an economy at a specific time?
(a) Near money
(b) Narrow money
(c) Money volume
(d) Money stock
Option d – Money stock
We covered all the money and banking class 12 mcq above in this post for free so that you can practice well for the exam.
Check out the latest MCQ content by visiting our mcqtube website homepage.
Also, check out:
