 |  Money and Banking 50 Flashcards |  Start |
 | What are the primary functions of money in an economy? |  Card: 1 / 50 |
| The primary functions of money in an economy are as a medium of exchange, a unit of account, and a store of value. | Card: 2 / 50 |
| Money simplifies exchanges by eliminating the need for ___, which is a requirement in barter systems. | Card: 3 / 50 |
| Double coincidence of wants | Card: 4 / 50 |
| True or False: Money must be easily convertible and universally accepted to serve as a store of value. | Card: 5 / 50 |
| True | Card: 6 / 50 |
| Fill in the blank: Money provides a standard measure for valuing goods and services, known as a ___ of account. | Card: 7 / 50 |
| Unit | Card: 8 / 50 |
| What is the impact of inflation on money's function as a store of value? | Card: 9 / 50 |
| Inflation can erode money's purchasing power, making it less effective as a store of value. | Card: 10 / 50 |
| I am a concept that allows you to trade goods without needing to find someone who wants what you have. What am I? | Card: 11 / 50 |
| Money | Card: 12 / 50 |
| Which function of money allows individuals to express the relative value of different goods, such as valuing a wristwatch at Rs 500? | Card: 13 / 50 |
| Unit of account | Card: 14 / 50 |
| In a barter system, what major difficulty is removed by the use of money? | Card: 15 / 50 |
| The need for a double coincidence of wants | Card: 16 / 50 |
| What makes money more convenient than other assets like gold or property for storing value? | Card: 17 / 50 |
| Money is easily convertible and has universal acceptance. | Card: 18 / 50 |
| Riddle: I am used to buy and sell, I can be coins or notes, what am I? | Card: 19 / 50 |
| Money | Card: 20 / 50 |
| What are the key components of a cashless economy? | Card: 21 / 50 |
| A cashless economy relies on digital transactions, using digital money transfers instead of physical currency. | Card: 22 / 50 |
| Fill in the blank: The Indian government's financial reforms aim for greater inclusion through ___ accounts, ___ enabled payment systems, and e-wallets. | Card: 23 / 50 |
| Jan Dhan, Aadhaar | Card: 24 / 50 |
| True or False: The central bank is not essential for the supply of money in a modern economy. | Card: 25 / 50 |
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| False: The central bank is crucial for the supply of money in a modern economy. | Card: 26 / 50 |
| What role does income play in the demand for money? | Card: 27 / 50 |
| As income increases, people engage in more transactions, thus increasing their demand for money. | Card: 28 / 50 |
| Riddle: I am needed for transactions, but my value can change with interest rates. What am I? | Card: 29 / 50 |
| Money | Card: 30 / 50 |
| What is the relationship between interest rates and demand for money? | Card: 31 / 50 |
| When interest rates rise, people prefer to earn interest rather than hold cash, leading to a decrease in their demand for money.  | Card: 32 / 50 |
| Fill in the blank: The Reserve Bank of India (RBI), established in 1935, is India's ___ bank. | Card: 33 / 50 |
| Central  | Card: 34 / 50 |
| What are the two types of institutions that create the supply of money in an economy? | Card: 35 / 50 |
| The central bank and commercial banking institutions. | Card: 36 / 50 |
| What is the primary role of a central bank in terms of money supply? | Card: 37 / 50 |
| To issue currency and control the money supply through methods like adjusting the bank rate and reserve ratios. | Card: 38 / 50 |
| Fill in the blank: Commercial banks earn profit by charging borrowers a higher interest rate than they pay to ___ on deposits. | Card: 39 / 50 |
| Depositors | Card: 40 / 50 |
| True or False: Banks can lend out all the money they receive in deposits without any restrictions. | Card: 41 / 50 |
| False. Banks must keep a portion of deposits to ensure they can meet withdrawal demands. | Card: 42 / 50 |
| What are the two main functions of commercial banks in the economy? | Card: 43 / 50 |
| Accepting deposits and lending money to borrowers. | Card: 44 / 50 |
| Riddle: I hold your money safe and sound, but I do not spend a dime. I help you make transactions with ease, what am I? | Card: 45 / 50 |
| A bank. | Card: 46 / 50 |
| Fill in the blank: The difference between the interest rate charged to borrowers and the interest rate paid to depositors is known as the ___. | Card: 47 / 50 |
| Spread. | Card: 48 / 50 |
| What ensures that depositors feel confident in keeping their money in banks? | Card: 49 / 50 |
| The availability of funds for withdrawals and the safety of storing money in banks. | Card: 50 / 50 |
| Completed! Keep practicing to master all of them. |  Restart |
