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This a MCQ (Multiple Choice Question) based practice test of Chapter 3 - Money and Banking of Economics of Class XII (12) for the quick revision/preparation of School Board examinationsQ Central Bank is a- a)Regional bank
- b)Commercial bank
- c)Rural bank
- d)Apex bank
Correct answer is option 'D'. Can you explain this answer?
This a MCQ (Multiple Choice Question) based practice test of Chapter 3 - Money and Banking of Economics of Class XII (12) for the quick revision/preparation of School Board examinations
Q Central Bank is a
a)
Regional bank
b)
Commercial bank
c)
Rural bank
d)
Apex bank
|
Kiran Mehta answered |
Apex is the top or highest part of something, especially one forming a point. An apex institution is a second-tier or wholesale organization that channels funding (grants, loans, guarantees) to multiple microfinance institutions (MFIs) in a single country or region. Funding may be provided with or without supporting technical services.
The Central Bank is the Apex Bank in India because of the following functions:
- Monetary authority, issue of currency. Banker and debt manager to government, banker to banks, regulation of banking system, manager of foreign exchange, regulator and supervisor of the payment and the settlement systems and maintaining financial stability
What do you mean by credit creation by commercial banks?- a)It is the process of total withdrawal creation
- b)It is the process of total deposit creation
- c)It is the process of loan creation
- d)It is the process of creation of foreign exchange
Correct answer is option 'B'. Can you explain this answer?
What do you mean by credit creation by commercial banks?
a)
It is the process of total withdrawal creation
b)
It is the process of total deposit creation
c)
It is the process of loan creation
d)
It is the process of creation of foreign exchange
|
|
Kavita Joshi answered |
Credit creation is the most significant function of the commercial banks. Commercial banks accept deposits and lend loans and advances. In this process they create two types of deposits, namely primary deposits and derivative or active deposits. The former refers to the cash deposited by a customer in a bank or deposit a cheque with the bank for collection. The banker merely accepts cash am converts it into a deposit. Hence, this is merely a passive role performed by the banks. These primary deposits do not add to the money stock in the economy. From their experience and observation the banks know that not all the customers will withdraw their deposits on any single day. Hence, after providing for some reserve to meet the cash requirement of the depositors, the banks lend the balance to the borrow. The amount of reserve to be maintained by the banks is Cash Reserve Ratio which is determined by the central bank.
Currency notes and coins are called as:- a)Flat money
- b)Legal tenders
- c)Fiat money
- d)Both b and c
Correct answer is option 'D'. Can you explain this answer?
Currency notes and coins are called as:
a)
Flat money
b)
Legal tenders
c)
Fiat money
d)
Both b and c
|
Jeeshan Ahmed answered |
Fiat money refers to any currency lacking intrinsic value that is declared legal tender by a government .so currency notes and coins are called as both legal tender and fiat money
APC= 1-APS. It is
- a)True
- b)FALSE
- c)Depends on their values
- d)None of these
Correct answer is option 'A'. Can you explain this answer?
APC= 1-APS. It is
a)
True
b)
FALSE
c)
Depends on their values
d)
None of these
|
|
Kiran Mehta answered |
The sum of the Average Propensity to Consume (APC) and Average Propensity to save (APS) is always equal to unity, i.e., APC + APS = 1. It is so because the money income can either be spent on consumption or it can be saved.
Money is a medium of- a)Communication
- b)Barter
- c)Speculation
- d)Exchange
Correct answer is option 'D'. Can you explain this answer?
Money is a medium of
a)
Communication
b)
Barter
c)
Speculation
d)
Exchange
|
Aryan Khanna answered |
Money is often defined in terms of the three functions or services that it provides. Money serves as a medium of exchange, as a store of value, and as a unit of account.
The process of money creation or credit creation IS done by- a)World bank
- b)commercial banks
- c)Rural bank
- d)Central bank
Correct answer is option 'B'. Can you explain this answer?
The process of money creation or credit creation IS done by
a)
World bank
b)
commercial banks
c)
Rural bank
d)
Central bank
|
|
Kavita Joshi answered |
It will be seen that the most important function of a commercial bank is the creation of credit money a function which overshadows all other banking functions.
Credit creation or money creation refers to the power of the banks to expand or contract demand deposits through the process of more loans, advances and investments.
Barter system is- a)Exchange of money
- b)Exchange of goods
- c)Exchange of trade
- d)Exchange of foreign exchange
Correct answer is option 'B'. Can you explain this answer?
Barter system is
a)
Exchange of money
b)
Exchange of goods
c)
Exchange of trade
d)
Exchange of foreign exchange
|
|
Alok Mehta answered |
A barter system is an old method of exchange. Th is system has been used for centuries and long before money was invented. People exchanged services and goods for other services and goods in return.
An example of capital goods is- a)Microwave
- b)Plant
- c)Fan
- d)TV
Correct answer is option 'B'. Can you explain this answer?
An example of capital goods is
a)
Microwave
b)
Plant
c)
Fan
d)
TV
|
|
Aryan Khanna answered |
Capital goods are man-made, durable items businesses use to produce goods and services. They include tools, buildings, vehicles, machinery and equipment.
Capital goods are also called durable goods, real capital, and economic capital. Some experts just refer to them as "capital." This last term is confusing because it can also mean financial capital. In accounting, capital goods are treated as fixed assets. They’re also known as “plant, property, and equipment.”
Capital goods are also called durable goods, real capital, and economic capital. Some experts just refer to them as "capital." This last term is confusing because it can also mean financial capital. In accounting, capital goods are treated as fixed assets. They’re also known as “plant, property, and equipment.”
An example of durable goods is- a)Coal
- b)Fan
- c)Milk
- d)Pepsi
Correct answer is option 'B'. Can you explain this answer?
An example of durable goods is
a)
Coal
b)
Fan
c)
Milk
d)
Pepsi
|
Rajat Patel answered |
Durable goods are a category of consumer products that do not need to be purchased frequently because they are made to last for a long time (usually
When will the domestic income be greater than the national income?- a)IF Net factor income earned from abroad is zero
- b)IF Net factor income earned from abroad is 1
- c)IF is negative
- d)IF Net factor income earned from abroad is positive
Correct answer is option 'C'. Can you explain this answer?
When will the domestic income be greater than the national income?
a)
IF Net factor income earned from abroad is zero
b)
IF Net factor income earned from abroad is 1
c)
IF is negative
d)
IF Net factor income earned from abroad is positive
|
Vikas Kapoor answered |
Gross National Income = Gross Domestic Income + Net Factor Income from Abroad
where,
Net Factor Income from Abroad = Factor Income earned from Abroad- Factor Income Paid Abroad
Thus, from here we can derive that Domestic Factor Income will be greater than the National Income when Factor income paid Abroad is more than Factor income earned from Abroad.
Net Factor Income from Abroad = Factor Income earned from Abroad- Factor Income Paid Abroad
Thus, from here we can derive that Domestic Factor Income will be greater than the National Income when Factor income paid Abroad is more than Factor income earned from Abroad.
An example of consumption goods is- a)plant
- b)Coal
- c)machine
- d)Fruits
Correct answer is option 'C'. Can you explain this answer?
An example of consumption goods is
a)
plant
b)
Coal
c)
machine
d)
Fruits
|
Sai Mishra answered |
Goods which are consumed for their own sake to satisfy current wants of consumers directly are called consumption (or consumer) goods.
Capital goods are fixed assets of producers which are repeatedly used in production of other goods and services. Alternatively durable goods which are bought for producing other goods but not for meeting immediate needs of the consumer are called capital goods.
One drawback of barter exchange is- a)Lack of goods
- b)Lack of trust
- c)Lack of double coincidence of wants
- d)Lack of coincidence of wants
Correct answer is option 'C'. Can you explain this answer?
One drawback of barter exchange is
a)
Lack of goods
b)
Lack of trust
c)
Lack of double coincidence of wants
d)
Lack of coincidence of wants
|
|
Rajat Patel answered |
The double coincidence of wants mean that both the parties have to agree to sell and buy each other's commodity i.e. what a person desires to sell is exactly what the other person wishes to buy. In a barter system commodities bare exchanged with commodities of other person without the use of money.
State which one of the following is true.- a)Gross domestic capital formation is always greater than gross fixed capital formation.
- b)Nominal GDP can never be less that real GDP
- c)Capital formation is a flow
- d)Bread is always a consumer good.
Correct answer is option 'C'. Can you explain this answer?
State which one of the following is true.
a)
Gross domestic capital formation is always greater than gross fixed capital formation.
b)
Nominal GDP can never be less that real GDP
c)
Capital formation is a flow
d)
Bread is always a consumer good.
|
|
Rajat Patel answered |
True, because it is measured over a period of time.
In final goods- a)Value is added
- b)Values is not added
- c)Value cannot be added anymore
- d)Value should not be added
Correct answer is option 'C'. Can you explain this answer?
In final goods
a)
Value is added
b)
Values is not added
c)
Value cannot be added anymore
d)
Value should not be added
|
Sakshi Agrawal answered |
Because it is used for immediate consumption .
it does not required any further processing
it does not required any further processing
One of the two components of government Revenue in the budget are
- a)Expenditure receipts
- b)Budget receipts
- c)Investment Expenditure
- d)Revenue receipts
Correct answer is option 'D'. Can you explain this answer?
One of the two components of government Revenue in the budget are
a)
Expenditure receipts
b)
Budget receipts
c)
Investment Expenditure
d)
Revenue receipts
|
Nandini Iyer answered |
The revenue budget consists of revenue receipts of the government (revenues from tax and other sources), and its expenditure. Revenue receipts are divided into tax and non-tax revenue. Tax revenues are made up of taxes such as income tax, corporate tax, excise, customs and other duties that the government levies.
Q The government budget is ana)Five yearly statementb)Half yearly statementc)Weekly statementd)Annual statementCorrect answer is option 'D'. Can you explain this answer?
|
|
Vikas Kapoor answered |
A government budget is a document prepared by the government and/or other political entity presenting its anticipated tax revenues (Inheritance tax, income tax, corporation tax, import taxes) and proposed spending / expenditure (Health care, Education, Defence, Roads, State Benefit) for the coming financial year.
APC= 1-APS. It isa)FALSEb)Depends on their valuesc)TRUEd)None of theseCorrect answer is option 'C'. Can you explain this answer?
|
|
Vikas Kapoor answered |
APC + APS = 1 because income is either used for consumption or for saving.
An example of transfer payments is- a)Old age pension
- b)Retirement pension
- c)Free meals in the company canteen
- d)Employers’ contribution for social security
Correct answer is option 'A'. Can you explain this answer?
An example of transfer payments is
a)
Old age pension
b)
Retirement pension
c)
Free meals in the company canteen
d)
Employers’ contribution for social security
|
Poonam Reddy answered |
Transfer payments are unilateral ( one sided payments ) no corresponding flow of goods and services for example: donation, old age pension, unemployment allowance etc
The functions of money is that it is a- a)Store of stocks
- b)Store of currency
- c)Store of value
- d)None of the above
Correct answer is option 'C'. Can you explain this answer?
The functions of money is that it is a
a)
Store of stocks
b)
Store of currency
c)
Store of value
d)
None of the above
|
Ameya Mukherjee answered |
Functions of Money
Money plays several roles in an economy. These roles are known as functions of money. The four key functions of money are:
1. Medium of Exchange: Money is used as a medium of exchange to buy goods and services. It makes transactions more convenient and efficient as it eliminates the need for barter system.
2. Measure of Value: Money serves as a measure of value as it provides a standard unit for measuring the worth of goods and services. This makes it easier for people to compare the values of different goods and services.
3. Standard of Deferred Payment: Money is used as a standard of deferred payment, which means that it allows people to buy goods and services on credit and pay for them later.
4. Store of Value: Money serves as a store of value as it can be saved and used at a later date. This function of money is important as it enables people to save for future needs and invest in assets.
The Correct Answer
The correct answer to the given question is option 'C', which states that money is a store of value. This is because money can be saved and used at a later date, which makes it a store of value. Money serves as a means of storing wealth, which can be used to meet future needs or make investments. The other options mentioned in the question, such as store of stocks and store of currency, are not functions of money.
Money plays several roles in an economy. These roles are known as functions of money. The four key functions of money are:
1. Medium of Exchange: Money is used as a medium of exchange to buy goods and services. It makes transactions more convenient and efficient as it eliminates the need for barter system.
2. Measure of Value: Money serves as a measure of value as it provides a standard unit for measuring the worth of goods and services. This makes it easier for people to compare the values of different goods and services.
3. Standard of Deferred Payment: Money is used as a standard of deferred payment, which means that it allows people to buy goods and services on credit and pay for them later.
4. Store of Value: Money serves as a store of value as it can be saved and used at a later date. This function of money is important as it enables people to save for future needs and invest in assets.
The Correct Answer
The correct answer to the given question is option 'C', which states that money is a store of value. This is because money can be saved and used at a later date, which makes it a store of value. Money serves as a means of storing wealth, which can be used to meet future needs or make investments. The other options mentioned in the question, such as store of stocks and store of currency, are not functions of money.
Bank rate is for- a)Central banks by the central bank
- b)Commercial banks by the government
- c)Central bank by the commercial banks
- d)Commercial banks by the central bank
Correct answer is option 'D'. Can you explain this answer?
Bank rate is for
a)
Central banks by the central bank
b)
Commercial banks by the government
c)
Central bank by the commercial banks
d)
Commercial banks by the central bank
|
Shiksha Academy answered |
The Reserve Bank of India (RBI) today gave freedom to banks in deciding their base rate. “Banks may choose any benchmark to arrive at the base rate for a specific tenor that may be disclosed transparently,” RBI said, as it released the final guidelines this evening.
A source of demand for foreign exchange is- a)Smuggle of goods & services
- b)Export of goods & services
- c)Brokerage of goods & services
- d)Import of goods & services
Correct answer is option 'D'. Can you explain this answer?
A source of demand for foreign exchange is
a)
Smuggle of goods & services
b)
Export of goods & services
c)
Brokerage of goods & services
d)
Import of goods & services
|
|
Rajat Patel answered |
The demand (or outflow) of foreign exchange comes from the people who need it to make payments in foreign currencies. It is demanded by the domestic residents for the following
Monitory policy is announced in India by _________- a)Ministry of Finance
- b)Reserve Bank of India
- c)Planning Commission
- d)Government
Correct answer is option 'B'. Can you explain this answer?
Monitory policy is announced in India by _________
a)
Ministry of Finance
b)
Reserve Bank of India
c)
Planning Commission
d)
Government
|
|
Poonam Reddy answered |
B: Reserve Bank of India
In India, monetary policy is announced by the Reserve Bank of India (RBI). The RBI is the central bank of India and is responsible for implementing and managing monetary policy in the country.
Monetary policy refers to the actions taken by the central bank to influence the supply and demand of money in the economy, with the aim of achieving certain macroeconomic objectives such as price stability, full employment, and economic growth. The RBI uses various tools, such as changing the interest rates, altering the reserve requirements for banks, and engaging in open market operations, to implement monetary policy in India.
The Ministry of Finance is responsible for managing the government's finances, including preparing the annual budget, mobilizing financial resources, and formulating fiscal policy. The Planning Commission is a government body that is responsible for formulating the country's five-year plans and for coordinating the development activities of various sectors of the economy. The government refers to the executive branch of government, which is responsible for implementing the policies and laws of the country.
The Reserve Bank of India issues all currency notes except:- a)500 Rupee note
- b)100 Rupee Note
- c)10 Rupee note
- d)1 Rupee note
Correct answer is 'D'. Can you explain this answer?
The Reserve Bank of India issues all currency notes except:
a)
500 Rupee note
b)
100 Rupee Note
c)
10 Rupee note
d)
1 Rupee note
|
|
Nandini Iyer answered |
Under Section 22 of the Reserve Bank of India Act, RBI has sole right to issue currency notes of various denominations except one rupee notes.
The One Rupee note is issued by Ministry of Finance and It bears the signatures of Finance Secretary, while other notes bear the signature of Governor RBI.
However RBI is the only source of legal tender money because distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as agent of the Government.
Which of the following in an example of macro economics- a)Inflation
- b)Consumer’s equilibrium
- c)Price determination
- d)Producer’s equilibrium
Correct answer is option 'A'. Can you explain this answer?
Which of the following in an example of macro economics
a)
Inflation
b)
Consumer’s equilibrium
c)
Price determination
d)
Producer’s equilibrium
|
|
Vikas Kapoor answered |
Inflation means roaming of money that goes from one hand to other as macro economics deals with whole economy the money in this form passes from one hand to another.
Can the net factor income earned from abroad be negative?- a)Never
- b)No
- c)Can’t say
- d)Yes
Correct answer is option 'D'. Can you explain this answer?
Can the net factor income earned from abroad be negative?
a)
Never
b)
No
c)
Can’t say
d)
Yes
|
|
Arun Khanna answered |
Net factor income earned from abroad which is used to differentiate between national income and domestic income.Alternatively NFIA is the difference between factor incomes
Money is anything that is- a)Regionally accepted
- b)Accepted by banks
- c)Universally accepted
- d)Locally accepted
Correct answer is option 'C'. Can you explain this answer?
Money is anything that is
a)
Regionally accepted
b)
Accepted by banks
c)
Universally accepted
d)
Locally accepted
|
|
Rajat Patel answered |
Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context. The main functions of money are distinguished as: a medium of exchange, a unit of account, a store of value and sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered as money.
Which of these is a Quantitative Method of Credit control?- a)Bank Rate
- b)Moral Suasion
- c)Margin Requirement
- d)All of the above
Correct answer is option 'A'. Can you explain this answer?
Which of these is a Quantitative Method of Credit control?
a)
Bank Rate
b)
Moral Suasion
c)
Margin Requirement
d)
All of the above
|
|
Ræjû Bhæï answered |
The important quantitative methods of credit control is (a) bank rate.The methods used by the central bank to regulate the flows of credit into particular directions of the economy are called qualitative or selective methods of credit control. Unlike the quantitative methods, which affect the total volume of credit, the qualitative methods affect the types of credit, extended by the commercial banks; they affect the composition rather than the size of credit in the economy.
One of the two components of government budget are- a)Investment budget
- b)Expenditure budget
- c)Income budget
- d)Revenue budget
Correct answer is option 'D'. Can you explain this answer?
One of the two components of government budget are
a)
Investment budget
b)
Expenditure budget
c)
Income budget
d)
Revenue budget
|
|
Nandini Iyer answered |
Government has several policies to implement in the overall task of performing its functions to meet the objectives of social & economic growth. For implementing these policies, it has to spend huge amount of funds on defence, administration, and development, welfare projects & various other relief operations. It is therefore necessary to find out all possible sources of getting funds so that sufficient revenue can be generated to meet the mounting expenditure.
The fraction of deposits kept as Cash Reserves by the commercial banks with themselves is called
- a)SLR
- b)LLR
- c)RR
- d)CRR
Correct answer is option 'D'. Can you explain this answer?
The fraction of deposits kept as Cash Reserves by the commercial banks with themselves is called
a)
SLR
b)
LLR
c)
RR
d)
CRR
|
Gowri Nambiar answered |
Definition of CRR
The Cash Reserve Ratio (CRR) is the fraction of deposits that commercial banks keep as reserves with themselves, either in cash or as deposits with the RBI. It is a monetary policy tool used by the central bank to regulate the money supply in the economy.
Importance of CRR
The CRR is an important tool for the RBI to regulate liquidity in the economy. By increasing the CRR, the RBI reduces the amount of money that commercial banks can lend, thereby reducing the money supply in the economy. Similarly, by decreasing the CRR, the RBI increases the amount of money that commercial banks can lend, thereby increasing the money supply in the economy.
Impact of CRR
The impact of CRR on the economy is significant. If the CRR is high, banks will have less money to lend, which can lead to a decrease in economic growth. On the other hand, if the CRR is low, banks will have more money to lend, which can lead to inflation.
Conclusion
In conclusion, the CRR is an important tool for the RBI to regulate the money supply in the economy. It is the fraction of deposits that commercial banks keep as reserves with themselves, either in cash or as deposits with the RBI. The impact of CRR on the economy is significant, and it is important for the RBI to use this tool wisely to achieve its monetary policy objectives.
The Cash Reserve Ratio (CRR) is the fraction of deposits that commercial banks keep as reserves with themselves, either in cash or as deposits with the RBI. It is a monetary policy tool used by the central bank to regulate the money supply in the economy.
Importance of CRR
The CRR is an important tool for the RBI to regulate liquidity in the economy. By increasing the CRR, the RBI reduces the amount of money that commercial banks can lend, thereby reducing the money supply in the economy. Similarly, by decreasing the CRR, the RBI increases the amount of money that commercial banks can lend, thereby increasing the money supply in the economy.
Impact of CRR
The impact of CRR on the economy is significant. If the CRR is high, banks will have less money to lend, which can lead to a decrease in economic growth. On the other hand, if the CRR is low, banks will have more money to lend, which can lead to inflation.
Conclusion
In conclusion, the CRR is an important tool for the RBI to regulate the money supply in the economy. It is the fraction of deposits that commercial banks keep as reserves with themselves, either in cash or as deposits with the RBI. The impact of CRR on the economy is significant, and it is important for the RBI to use this tool wisely to achieve its monetary policy objectives.
Can the net indirect taxes be negative?- a)Yes
- b)Never
- c)Can’t say
- d)No
Correct answer is option 'A'. Can you explain this answer?
Can the net indirect taxes be negative?
a)
Yes
b)
Never
c)
Can’t say
d)
No
|
|
Rajat Patel answered |
True: It can happen when NFIA is negative i.e., factor income paid to abroad is more than factor income received from abroad.
Final goods are those- a)Which are for resale
- b)Which are for long term use
- c)Which capital can buy
- d)Which are for final consumption
Correct answer is option 'D'. Can you explain this answer?
Final goods are those
a)
Which are for resale
b)
Which are for long term use
c)
Which capital can buy
d)
Which are for final consumption
|
Abhishek Choudhary answered |
Question hi answer hai iska.....'Final goods' -Means No Further production is required....it is ready for Consumption like-,Milk is a final good if it is purchased to drink,Bicycle that is sold to consumer is a final good or consumer goods.
Which of the following is a qualitative method of credit control - a)Bank rate
- b)Open market operations
- c)Variation in the reserve requirement
- d)Regulation of consumer credit
Correct answer is option 'D'. Can you explain this answer?
Which of the following is a qualitative method of credit control
a)
Bank rate
b)
Open market operations
c)
Variation in the reserve requirement
d)
Regulation of consumer credit
|
Amita Das answered |
Credit control is most important function of Reserve Bank of India. Credit control in the economy is required for the smooth functioning of the economy. By using credit control methods RBI tries to maintain monetary stability. There are two types of methods: Quantitative control to regulates the volume of total credit.
The major source of Revenue receipts for the government is not
- a)Profits
- b)Tax Revenue
- c)Income tax
- d)Wealth tax
Correct answer is option 'D'. Can you explain this answer?
The major source of Revenue receipts for the government is not
a)
Profits
b)
Tax Revenue
c)
Income tax
d)
Wealth tax
|
Jayant Mishra answered |
Wealth tax is not the major source of revenue receipts for the government because it is not typically a significant contributor to the government's total revenue. Wealth tax is a tax levied on the net wealth or assets of individuals, such as real estate, cash, bank deposits, investments, and businesses. However, the revenue generated from wealth tax is often relatively low compared to other forms of taxation such as income tax, corporate tax, and indirect taxes like GST (Goods and Services Tax). Therefore, while wealth tax is one of the sources of revenue for the government, it is not considered a major contributor to government revenue when compared to other taxes.
Which one of the following statement defines the term “Reverse Repo Rate?- a)The rate at which the commercial banks borrow money from RBI
- b)The rate at which RBI borrows from other banks
- c)The rate at which the commercial banks borrow from each other
- d)None of the above.
Correct answer is option 'A'. Can you explain this answer?
Which one of the following statement defines the term “Reverse Repo Rate?
a)
The rate at which the commercial banks borrow money from RBI
b)
The rate at which RBI borrows from other banks
c)
The rate at which the commercial banks borrow from each other
d)
None of the above.
|
Arka Kaur answered |
Reverse repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) borrows money from commercial banks within the country. It is a monetary policy instrument which can be used to control the money supply in the country.
The Reserve Bank of India issues all currency notes except:- a)500 Rupee note
- b)100 Rupee Note
- c)10 Rupee note
- d)1 Rupee note
Correct answer is option 'D'. Can you explain this answer?
The Reserve Bank of India issues all currency notes except:
a)
500 Rupee note
b)
100 Rupee Note
c)
10 Rupee note
d)
1 Rupee note
|
Vinit Gupta answered |
Because the power is in hands of government
Intermediate goods are those- a)Which are sold
- b)Which are for long term use
- c)Which are for resale
- d)Which capital can buy
Correct answer is option 'C'. Can you explain this answer?
Intermediate goods are those
a)
Which are sold
b)
Which are for long term use
c)
Which are for resale
d)
Which capital can buy
|
Shivanshi Rastogi answered |
Because we convert it into final goods for sale
Flexible exchange rate is- a)Fixed
- b)Determined
- c)Ordered
- d)Can’t say
Correct answer is option 'B'. Can you explain this answer?
Flexible exchange rate is
a)
Fixed
b)
Determined
c)
Ordered
d)
Can’t say
|
|
Vikas Kapoor answered |
The flexible rate of exchange is the rate that is determined by the supply-demand forces in the foreign exchange market.
Which among the following is considered to be the most liquid asset?- a)Gold
- b)Money
- c)Land
- d)Treasury bonds
Correct answer is option 'B'. Can you explain this answer?
Which among the following is considered to be the most liquid asset?
a)
Gold
b)
Money
c)
Land
d)
Treasury bonds
|
Meera Rane answered |
Most Liquid Asset: Money
Liquid assets are those assets that can be easily converted into cash without losing its value. The most liquid asset is considered to be money. Money is the most liquid of all assets because it is widely accepted in transactions for goods and services. It can be easily exchanged for goods and services, and it is universally recognized as a store of value.
Other assets such as gold, land, and treasury bonds may have value, but they are not as easily converted into cash as money. Gold, for instance, needs to be sold in the market, which may take time, and the value of land may vary depending on the location, demand, and other factors. Treasury bonds have a fixed maturity period and may not be easily sold in the market if the demand is low.
Money, on the other hand, can be readily used to settle debts, pay bills or purchase goods and services. It is widely accepted and can be used in any currency. Money can also be stored in different forms like cash, bank deposits, or other financial instruments. With the rise of digital payment systems, money can now be easily transferred electronically, making it even more liquid.
Conclusion
In conclusion, money is the most liquid asset because it can be easily converted into cash and is widely accepted in transactions. While other assets may have value, they are not as easily convertible into cash as money.
Liquid assets are those assets that can be easily converted into cash without losing its value. The most liquid asset is considered to be money. Money is the most liquid of all assets because it is widely accepted in transactions for goods and services. It can be easily exchanged for goods and services, and it is universally recognized as a store of value.
Other assets such as gold, land, and treasury bonds may have value, but they are not as easily converted into cash as money. Gold, for instance, needs to be sold in the market, which may take time, and the value of land may vary depending on the location, demand, and other factors. Treasury bonds have a fixed maturity period and may not be easily sold in the market if the demand is low.
Money, on the other hand, can be readily used to settle debts, pay bills or purchase goods and services. It is widely accepted and can be used in any currency. Money can also be stored in different forms like cash, bank deposits, or other financial instruments. With the rise of digital payment systems, money can now be easily transferred electronically, making it even more liquid.
Conclusion
In conclusion, money is the most liquid asset because it can be easily converted into cash and is widely accepted in transactions. While other assets may have value, they are not as easily convertible into cash as money.
Who is the custodian of National reserves of international currency?- a)SBI
- b)IDBI
- c)RBI
- d)ICICI
Correct answer is option 'C'. Can you explain this answer?
Who is the custodian of National reserves of international currency?
a)
SBI
b)
IDBI
c)
RBI
d)
ICICI
|
|
Lipika Kumari answered |
The RBI acts as the custodian of the country's foreign exchange reserves, manages exchange control and acts as the agent of the government in respect of India's membership of the IMF
In S= -a+ (1-b) Y, -a representsa)The amount of dissavings done when there is high level of income.b)The amount of savings done when there is zero level of income.c)The amount of dissavings done when there is zero level of income.d)The amount of savings done when there is high level of income.Correct answer is option 'C'. Can you explain this answer?
|
Divine Novice answered |
Answer should be c
The portion of total deposit of commercial banks which is required to be kept with Central Bank in the form of cash deposit is called _________.- a)SLR
- b)CRR
- c)Bank Rate
- d)Mandatory deposit
Correct answer is option 'B'. Can you explain this answer?
The portion of total deposit of commercial banks which is required to be kept with Central Bank in the form of cash deposit is called _________.
a)
SLR
b)
CRR
c)
Bank Rate
d)
Mandatory deposit
|
Anjana Sen answered |
Understanding CRR (Cash Reserve Ratio)
The Cash Reserve Ratio (CRR) is a crucial aspect of the banking system that regulates the amount of funds that commercial banks must hold in reserve with the Central Bank. Here’s a detailed look at the concept:
Definition of CRR
- CRR is the percentage of a bank's total deposits that must be maintained as reserves with the Central Bank in the form of cash.
- It is a regulatory requirement aimed at ensuring liquidity and stability within the banking system.
Purpose of CRR
- Liquidity Management: It ensures that banks have enough liquid cash to meet customer withdrawals and other obligations.
- Control Inflation: By adjusting the CRR, the Central Bank can influence the amount of money that banks can lend, thereby controlling inflation.
- Encourage Stability: A higher CRR can help prevent banks from overextending their loans, promoting financial stability.
Impact on Banking Operations
- Lending Capacity: A higher CRR means less money available for banks to lend, which may lead to higher interest rates for borrowers.
- Interest Rates: Changes in CRR directly affect the interest rates set by banks for loans and deposits.
Comparison with Other Terms
- SLR (Statutory Liquidity Ratio): Different from CRR, SLR is the ratio of liquid assets that banks must maintain. It includes cash, gold, and government securities.
- Bank Rate: This is the rate at which the Central Bank lends money to commercial banks. It impacts overall lending rates in the economy but is not a reserve requirement.
In summary, CRR is essential for maintaining the financial health of banks and the overall economy, ensuring that banks can meet their obligations while helping to regulate credit in the market.
The Cash Reserve Ratio (CRR) is a crucial aspect of the banking system that regulates the amount of funds that commercial banks must hold in reserve with the Central Bank. Here’s a detailed look at the concept:
Definition of CRR
- CRR is the percentage of a bank's total deposits that must be maintained as reserves with the Central Bank in the form of cash.
- It is a regulatory requirement aimed at ensuring liquidity and stability within the banking system.
Purpose of CRR
- Liquidity Management: It ensures that banks have enough liquid cash to meet customer withdrawals and other obligations.
- Control Inflation: By adjusting the CRR, the Central Bank can influence the amount of money that banks can lend, thereby controlling inflation.
- Encourage Stability: A higher CRR can help prevent banks from overextending their loans, promoting financial stability.
Impact on Banking Operations
- Lending Capacity: A higher CRR means less money available for banks to lend, which may lead to higher interest rates for borrowers.
- Interest Rates: Changes in CRR directly affect the interest rates set by banks for loans and deposits.
Comparison with Other Terms
- SLR (Statutory Liquidity Ratio): Different from CRR, SLR is the ratio of liquid assets that banks must maintain. It includes cash, gold, and government securities.
- Bank Rate: This is the rate at which the Central Bank lends money to commercial banks. It impacts overall lending rates in the economy but is not a reserve requirement.
In summary, CRR is essential for maintaining the financial health of banks and the overall economy, ensuring that banks can meet their obligations while helping to regulate credit in the market.
The fraction of deposits kept as Cash Reserves by the commercial banks is called- a)LLR
- b)CRR
- c)PLR
- d)SLR
Correct answer is option 'B'. Can you explain this answer?
The fraction of deposits kept as Cash Reserves by the commercial banks is called
a)
LLR
b)
CRR
c)
PLR
d)
SLR
|
|
Vikas Kapoor answered |
Cash Reserve Ratio is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves with the central bank.
The RBI can decrease the money supply in the market by:
- a)Selling government securities
- b)buying government securities
- c)borrowing money from commercial banks
- d)none of the above
Correct answer is option 'A'. Can you explain this answer?
The RBI can decrease the money supply in the market by:
a)
Selling government securities
b)
buying government securities
c)
borrowing money from commercial banks
d)
none of the above
|
|
Arun Khanna answered |
RBI controls money supply in the market through various tools and measures.CRR - Cash Reserve Ratio is the proportion of
MPS= 1+MPC. It is
- a)Depends on their values
- b)TRUE
- c)False
- d)None of these
Correct answer is option 'C'. Can you explain this answer?
MPS= 1+MPC. It is
a)
Depends on their values
b)
TRUE
c)
False
d)
None of these
|
Priya Patel answered |
MPS is measured as ratio of change in savings to change in income, its value lies between 0 and 1. Also, marginal propensity to save is opposite of marginal propensity to consume. Mathematically, in a closed economy, MPS + MPC = 1, since an increase in one unit of income will be either consumed or saved.
One of the other two components of government Revenue in the budget are- a)Expenditure receipts
- b)Revenue Expenditure
- c)Capital receipts
- d)Budget receipts
Correct answer is option 'C'. Can you explain this answer?
One of the other two components of government Revenue in the budget are
a)
Expenditure receipts
b)
Revenue Expenditure
c)
Capital receipts
d)
Budget receipts
|
|
Vikas Kapoor answered |
Capital receipts accrue on realisation of assets which is nothing but source of funds. Further, when we sell any asset it is grouped under non-operating income. But, profit or loss on it would be released to the revenue account which in turn would be transferred to reserves. So, we are unlocking the value of asset i.e. economic benefit on such asset is actually realized. Economic benefit means 'Increase in revenue or decrease in operating cost' which is nothing but revenue in nature. So, it is also the component of government revenue.
The budget is divided into two parts — (i) Revenue Budget, and (ii) Capital Budget.
This a MCQ (Multiple Choice Question) based practice test of Chapter 2 - National Income Accounting of Economics of Class XII (12) for the quick revision/preparation of School Board examinationsQ Explain the meaning of non-market activities- a)Involuntary
- b)Non marketable
- c)Economic
- d)Production
Correct answer is option 'B'. Can you explain this answer?
This a MCQ (Multiple Choice Question) based practice test of Chapter 2 - National Income Accounting of Economics of Class XII (12) for the quick revision/preparation of School Board examinations
Q Explain the meaning of non-market activities
a)
Involuntary
b)
Non marketable
c)
Economic
d)
Production
|
|
Nandini Iyer answered |
Non market Activities -
1) Non market activities are those activities primarily undertaken for the purpose of self-consumption. These activities don't give profit as they are for self consumption.
2) The output of the non market activities is neither for sale in the market nor for earning profit. These activities can be for consumption and processing of primary products for one's own use.
3) Example : A farmer cultivates primarily for himself and his family and not for earning profit.
The portion of total deposit which a commercial bank has to keep with itself in liquid assets is known as - a)CRR
- b)SLR
- c)REPO
- d)Reverse REPO
Correct answer is option 'B'. Can you explain this answer?
The portion of total deposit which a commercial bank has to keep with itself in liquid assets is known as
a)
CRR
b)
SLR
c)
REPO
d)
Reverse REPO
|
Freedom Institute answered |
SLR means liquid statutory ratio. Every bank has to keep that amount of money every time. because customers can withdrew money any time. Bank can not give that money on loan or for any other purpose.
Can the change in inventories be in negative?- a)No
- b)Yes
- c)Can’t say
- d)Never
Correct answer is option 'B'. Can you explain this answer?
Can the change in inventories be in negative?
a)
No
b)
Yes
c)
Can’t say
d)
Never
|
Sumair Sadiq answered |
Yes I can explain it .change in inventory mean comparison of stock we have In
This a MCQ (Multiple Choice Question) based practice test of Chapter 4 - Income Determination of Economics of Class XII (12) for the quick revision/preparation of School Board examinationsQ In a two sector economy Aggregate Demand equals- a)Consumption + Government Expenditure
- b)Consumption + Investment
- c)Consumption + Exports
- d)Consumption + Private consumption expenditure
Correct answer is option 'B'. Can you explain this answer?
This a MCQ (Multiple Choice Question) based practice test of Chapter 4 - Income Determination of Economics of Class XII (12) for the quick revision/preparation of School Board examinations
Q In a two sector economy Aggregate Demand equals
a)
Consumption + Government Expenditure
b)
Consumption + Investment
c)
Consumption + Exports
d)
Consumption + Private consumption expenditure
|
Bhavana Chauhan answered |
Explanation:
- The two sector economy consists of households and firms. The aggregate demand in a two sector economy is determined by the consumption and investment expenditure.
- Consumption expenditure is the expenditure made by households on goods and services produced by firms.
- Investment expenditure is the expenditure made by firms on capital goods such as machinery, equipment, and buildings, which are used to produce goods and services.
- Aggregate Demand (AD) is the total demand for goods and services in an economy at a given price level and is represented by the equation AD = C + I.
- Therefore, in a two sector economy, Aggregate Demand equals Consumption + Investment (AD = C + I).
- Hence, option 'B' is the correct answer.
Chapter doubts & questions for Class 12 Macroeconomics - NCERT Textbooks (Class 6 to Class 12) 2025 is part of CTET & State TET exam preparation. The chapters have been prepared according to the CTET & State TET exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for CTET & State TET 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
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