Scanner Chapter 5 & 6 - Macro Economics Commerce Notes | EduRev

Economics for CBSE Class 12 Board Examinations

Commerce : Scanner Chapter 5 & 6 - Macro Economics Commerce Notes | EduRev

The document Scanner Chapter 5 & 6 - Macro Economics Commerce Notes | EduRev is a part of the Commerce Course Economics for CBSE Class 12 Board Examinations.
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Money

SAMPLE PAPER + C.B.S.E QUESTIONS

(Q1) Give the meaning of money.

(1 M)

(Q2) State the two components of money supply.

(1 M)

(Q3) How does money solve the problem of double coincidence of wants?

(3M)

(Q4) How does money overcome the main problem of exchange in the barter system ? Explain
(Q5) Explain the ‘medium of exchange’ function of money.

(4M)

(Q6) How does money solve the problem of double coincidence of wants ?

(3M)

(Q7) Describe the following functions of money :- (a) Medium of exchange
(b) Standard of deferred payment

(4M)

(Q8) Explain any two functions of money.

(4M)

C.B.S.E PAPER 2011 & 2012

(Q1) Define money.

(1 mark)

(Q2) What are time deposits ?

(1 mark)

(Q3) Define Money Supply ?
(Q4) Explain the ‘standard of deferred payment’ function of money.

(3 marks)

C.B.S.E PAPER 2013

(Q1) State the components of supply of money.

(1 M)

(Q2) Explain the ‘medium of exchange’ function of money.

(3 M)

C.B.S.E PAPER 2014 & SAMPLE PAPER

(Q1) Explain the significance of the ‘Unit of Account’ function of money. ‘

OR

Explain the significance of the ‘Standard of Deferred Payment’ function of money.


(Q2) State the two components of money supply.

(1 mark)

(Q3) Explain

(a) store of value and
(b) measure of deferred payments functions of money.

(4M)

(Q4) What is barter ?

(1 mark)

(Q5) What are demand deposits ?

 

CBSE 2015 & SAMPLE PAPER

(Q1) Which of the following agency is responsible for issuing Rs.1 currency note in India?

(1M)

(i) Reserve Bank of India. (iii) Ministry of finance
(ii) Ministry of Commerce (iv) Niti Aayog

Ans :: Ministry of finance


(Q2) Who regulates money supply in India ?
(i) Government of India (ii) RBI
(iii) Commercial Banks (iv) Planning Commission

(Q3) Read the following dialogue between two people

(1M)

Sita : I want 1kg of potatoes
Rani : What will you give in exchange?
Sita : I can give you 2 litres of milk in return for the potatoes.
Rani : I don’t need milk. I want a pair of shoe
Which of the following problem is being faced by Sita and Rani in their exchange process?
(a) Lack of double coincidence of wants (b) Absence of common units of value
(c) Lack of store of value (d) Lack of standard of deferred payment

Ans :: (a)

 

CBSE 2016

(Q1) Explain the ‘medium of exchange’ function of money. How has it solved the related
problem created by barter ?

(4M)

 or

Explain the ‘standard of deferred payments’ function of money. How has it solved the related
problem created by barter ?

(Q22) Explain the ‘store of value’ function of money. How has to solved the related problem
created by barter ? ‘ or

(3M)

Explain the ‘unit of account’ function of money. How has it solved the related problem created by barter ?

EXTRA QUESTION’S
 

(Q1) Explain any two drawback of the barter system .How does money helps in removing these drawback?
(Q2) How does money has separated the act of sale and purchase of goods ?
(Q3) Money is what money does ? Explain
(Q4) Name primary function of money ?
(Q5) What is high powered money ? Which component of it is not included in money supply and why ?

(Q 6) “Like money, goods also perform the function of store of value with same merits.” Defend or refute.

(Q7) Determine M1 Currency held with the public 5 , 60 ,000
Time Deposit 6 , 10, 000
Demand deposit with banks 4 , 10 ,000
Other deposits with RBI 40 , 000

(Q8) “ Savers suffer as inflation rises to 9.5 %” . Explain the function of money which is most involved in the statement

(Q9) “ Money is a common denomination in which values of all goods and services are expressed” . Explain the function of money which is most involved in the statement

(Q10) Can a situation arises when money plays no role whatsover ?

Ans:: where there is no exchange . Example a
person or family on an island without any exchange

(Q11) Why people hold notes and coins when it is clear that the intrinsic value ( commodity value) of notes and coins is almost negligible ?

( ans :: these are legal tender or fiat money )

(Q12) Double coincidence of wants is an essential requirement of exchange . Comment

( ans :: No )

(Q13) Money becomes a commodity when intrinsic value of money exceeds its face value . Defend or refute

( ans :: Yes )

(Q14) Rohan brought a house . While valuing his house , his grandmother valued it in terms of
buffalo and carts . What is the problem that is being faced in the valuation process ?

(Q15) Do you agree with the view that the excess of money supply hinders the process of economic growth ? Give reasons

( ans :: Yes , leads to inflation )

(Q16) When the barter system was in use, a merchant had to incurred costs which were all in the absence of money. Name and define such costs with their components.

(Q17) Why people accept cheques to settle transactions even when these are not a legal
tender ?

(Q 18) A soap manufacturing company wishes to pay compensation to its employees in the form of soaps. However, employees want compensation in the form of money. Why compensation is more convenient in terms of money than in soaps ?

Ans. Soaps lack general acceptability, while money enjoys merit of general acceptability. Employees can purchase any goods and services with the help of money at any point of time and there is no problem of lack of double coincidence of wants.

 

Banking

C.B.S.E QUESTIONS


(Q1) Explain briefly “ banker to Govt function “ of Central bank ?

(Q2) Explain four main function of Central Bank ?

(Q3) Explain briefly “ Currency authority function “ of Central bank ?

(Q4) Explain briefly “ Lender Of Last Resort function “ of Central bank ?

(Q5) How does a central bank perform the function of controller of credit ?
(Q6) What is a commercial bank?

(1M) (C.B.S.E ‘08)


(Q7) Explain ‘banker to the government’ function of central bank.

(4M) (S.P ‘08)

(Q8) State the role of central bank as a banker to the government.

(4M) (S.P ‘08)

(Q9) Explain any two functions of a central bank.

(4M) (C.B.S.E ‘09)

SAMPLE PAPER + C.B.S.E 2010


(Q1) Explain the ‘banker to the government’ function of the central bank.

(3M)

(Q2)How does a commerical bank creat money ? ‘

or
Explain how do ‘ open market operations’ by the central bank effect money creation by commercial banks.

(3M)

(Q3) Explain the process of money creation by commercial banks.

(6 M)

(Q4) Explain the function of a Central Bank as a banker to the government.

(4 M)

OR
Explain the open market operations method of credit control used by a Central Bank

C.B.S.E PAPER 2011 & 2012


(Q1) Explain the following functions of the central bank :

(6 marks)

(i) Bank of issue (ii) Bankers’ bank

(Q2) Explain the ‘lender of last resort’ function of the central bank.

 or
Explain ‘government’s banker’ function of the central bank.

(4 marks)

C.B.S.E PAPER 2013


(Q1) Explain the ‘lender of last resort’ function of central Bank.
(Q2) Explain the credit creation role of commercial banks with the help of a numerical example.

(Q3) What is bank Money ?

Ans :: Bank money refers to demand deposits created by the commercial banks

(Q4) What is legal reserve ratio ? Explain its components ?

(c)

C. B. S. E PAPER 2014 & SAMPLE PAPER

(Q1) What are time deposits ?

(Q2) Explain ‘Banker to the Government’ function of the central bank.
OR
Explain ‘Bankers Bank’ function of the central bank.

(Q3) Giving a numerical example, explain the process of money creation by the commercial
banks.

(6 marks)

(Q4) What is Central Bank ?

(1 mark)

CBSE 2015


(Q1) Explain the “Bankers’ Bank function” of the central bank. ‘

or
Explain the “Bank of Issue function” of the central bank.

(4 M)


Ans :: As the banker to the banks, the Central Bank holds a part of the cash reserves of commercial banks. From these reserves it lends to commercial banks when they are in need of funds. Central bank also provides cheque clearing and remittance facilities to the commercial banks.

or
The central bank is the sole authority for the issue of currency in the country. It promotes efficiency in the financial system. It leads to uniformity in the issue of currency, and it gives Central Bank control over money supply.

(Q2) Currency is issued by the central bank, yet we say that commercial banks creation by commercial banks likely to affect the national income ? Explain.

(4 M)

Ans :: Money supply has two components: Currency and demand deposits with commercial banks. Currency is issued by the central bank while deposits are created by commercial banks by lending money to the people. In this way commercial banks also create money.

(2M)

Commercial banks lend money mainly to investors. The rise in investment in the economy leads to rise in national income through the multiplier effect.

(2M)

(Q3) GOI has recently launched ‘Jan-Dhan’aimed at every household in the country to have at
least one bank account . Explain how deposit made under the plan are going to affect NY of the
country

Ans :: More accounts leads to more deposits which means more lending capacity / credit creation
which further means more investment . Hence more NY
 

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