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12th Grade > Economics - 2

UNDERSTANDING MONEY MCQs

Total Questions : 29 | Page 1 of 3 pages
Question 1. The situation in which a panic causes several people to withdraw their deposits immediately is called:
  1.    Bank walk
  2.    Bank run
  3.    Bank bolt
  4.    Bank scuttle
 Discuss Question
Answer: Option B. -> Bank run
:
B
A bank run is a situation in which sudden panic leads all depositors to withdraw their funds from their accounts.
Question 2. Money that is issued by the authority of the government is called:
  1.    Full bodied money
  2.    Credit money
  3.    Fiat money
  4.    Fiduciary money
 Discuss Question
Answer: Option C. -> Fiat money
:
C
Fiat money refers to money whose value has been decreed by the government.
Question 3. The value of a cow today is the same as its value one year from now. Which of the following functions does the cow serve?
  1.    Medium of exchange
  2.    Store of value
  3.    Unit of account
  4.    Standard of deferred payments
 Discuss Question
Answer: Option B. -> Store of value
:
B
As a store of value, the cow maintains its value over time.
Question 4. Full-bodied money is that money whose money value and commodity value are:
  1.    equal in the market
  2.    declared as equal by the government
  3.    different in the market
  4.    declared as equal by the RBI
 Discuss Question
Answer: Option A. -> equal in the market
:
A
For full-bodied money, the money value and commodity value of the money are equal in the market.
Question 5. Money as a standard for deferred payments has led to the emergence of:
  1.    Commodity market
  2.    Financial market
  3.    Both (a) and (b)
  4.    None of these
 Discuss Question
Answer: Option B. -> Financial market
:
B
The financial market has emerged from money being the standard of deferred payments.
Question 6. Dynamic functions of money are related to:
  1.    exchange of goods and services
  2.    valuation of goods and services
  3.    transfer of wealth across different parts of the economy
  4.    stability and growth of the economy
 Discuss Question
Answer: Option D. -> stability and growth of the economy
:
D
In a dynamic role, money plays an important part in the life of citizens and the economic system.
Question 7. The ability of money to be moved easily is called:
  1.    Uniformity
  2.    Fungibility
  3.    Portability
  4.    Statis
 Discuss Question
Answer: Option C. -> Portability
:
C
Portability is a key characteristic of money describing that money can be easily carried around.
Question 8. Who supplies money in India?
  1.    The RBI
  2.    The commercial banks
  3.    The government
  4.    All of these
 Discuss Question
Answer: Option D. -> All of these
:
D
All of these are suppliers of money because money supply includes currency, deposits, liquid government securities, and bonds, among others.
Question 9. Demand deposits are:
  1.    Chequeable deposits
  2.    Non-chequeable deposits
  3.    Deposits which can be withdrawn on demand 
  4.    Both (a) and (c)
 Discuss Question
Answer: Option D. -> Both (a) and (c)
:
D
Demand deposits are chequeable and can be withdrawn at any time.
Question 10. Which of the following is the correct order in the evolution of money?
  1.    Gold, notes, credit cards, salt
  2.    Salt, credit cards, gold, notes
  3.    Salt, gold, notes, credit cards
  4.    Gold, salt, notes, credit cards
 Discuss Question
Answer: Option C. -> Salt, gold, notes, credit cards
:
C
Money evolved in the order of Salt-gold-notes-credit cards.

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