Frequently Asked Questions - Money and Banking | Economics Class 12 - Commerce PDF Download

FREQUENTLY ASKED CBSE BOARD QUESTIONS

One Mark Questions (1M)

1. Define money.
2. M1 = ……………………………………………
3. What is meant by barter system?
4. Write two drawbacks of barter exchange.
5. List out two main functions of money.
6. Define commercial bank.
7. Give the meaning of central bank.
8. What do you mean by credit creation by commercial banks.
9. Define bank rate.
10. Define cash reserve ratio.
11. Give the meaning of statutory liquidity ratio.
12. What is meant by open market operations (OMO)?
13. Define money supply.
14. Write one difference between commercial bank and central bank.
15. Mention two important functions of central bank.

Three Marks Questions (3M)

1. Explain briefly any two main functions of money.
2. How does the central bank apply bank rate as a measure of credit control?
3. What are the components of M1?
4. State any THREE functions of central bank. Explain any one.
5. Explain the “lender of last resort” function of central bank.
6. What is money multiplier?
7. Explain briefly any three drawbacks of barter system
8. Explain the open market operations method of credit control used by a central bank.

Four Marks Questions (4 M)

1. Distinguish between commercial banks and central bank.
2. Explain how money solves the drawbacks of barter exchange.
3. What is money multiplier? How will you determine its value?
4. Briefly explain any TWO quantitative measures of credit control by the central bank.
5. Explain briefly the credit creation by commercial banks with the help of an example.