MCQs - Banking | Crash Course of Macro Economics -Class 12 - Commerce PDF Download

Q.1 Banks are able to crease credit many times more than initial deposit through _____

(a) Secondary deposits
(b) Advancing loans
(c) Accepting deposits
(d) overdraft facility

Ans: A

Q.2 
Which of the following is bank money ?

(a) Coins
(b) Currency
(c) Cash reserves of banks
(d) Demand deposits in banks
Ans: D

Q.3 The creation of _____ is called credit creation.

(a) Time deposits
(b) Primary deposits
(c) Secondary deposits
(d) None of these
Ans: C

Q.4 
Initial deposits made by the people from their own resources are called ____

(a) Time deposits
(b) Primary deposits
(c) Secondary deposits
(d) None of these
Ans: B

Q.5 
Commercial banks keep a small fraction of their demand deposits as reserves to meet the cash requirements of their depositors.  This small fraction is known as

(a) CRR
(b) LRR
(c) SLR
(d) None of these
Ans: B

Q.6 
Commercial banks have to keep a minimum percentage of their deposits with the central bank.  This minimum percentage is known as

(a) CRR
(b) LRR
(c) SLR
(d) None of these
Ans: A

Q.7 
Which of the following is not concerned with banking organisation ?

(a) Bank rate
(b) Fiscal deficit
(c) Credit creation
(d) Cash reserve ratio
Ans: B

Q.8 
In India, operative cash reserves are known as :

(a) CRR
(b) SLR
(c) vault cash
(d) none of these
Ans: C

Q.9 
All scheduled banks in India are
(a) owned by the government of India.
(b) owned by corporations.
(c) owned by business houses(d) not nationalised banks.
Ans: A


Q.10 Manager of Bank of India, Parliament Street: “I am in dire need for funds to meet my short-term needs for 5 Days.” Manager of Syndicate Bank, Karol Bagh: “Why don’t you borrow from the Central bank to meet your this need for 5 days only”

Which of the interest rate will be charged by the Central bank ?

(a) Repo Rate
(b) Reverse Repo Rate
(c) Bank Rate
(d) margin Requirements
Ans: A

Q.11 
Shweta :I am not clear about what happens to my money saved in the bank.  Do you know about it ?  Upasana    : Yes I know, the bank gives loans from this money collected with it.Shweta : But does it lend all the money to the borrowers ?

Upasana: No it cannot do so.  It has to legally and compulsorily keep some percentage of its deposits in the form of cash and liquid assets as reserves. 

Which of the reserve ratio is Upasana sharing with Shweta?

(a) CRR
(b) LRR
(c) SLR
(d) None of these
Ans: B


Go through Crash Course of Macro Economics -Class 12 here.

Cover the concepts of Scanner Banking here. 

The document MCQs - Banking | Crash Course of Macro Economics -Class 12 - Commerce is a part of the Commerce Course Crash Course of Macro Economics -Class 12.
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FAQs on MCQs - Banking - Crash Course of Macro Economics -Class 12 - Commerce

1. What is the difference between commercial banking and merchant banking?
Ans. Commercial banking primarily focuses on providing services to individuals and businesses, such as accepting deposits, providing loans, and offering basic financial products. On the other hand, merchant banking involves activities like underwriting, syndication, and advisory services for large corporations, governments, and other financial institutions.
2. How does electronic banking impact the traditional banking system?
Ans. Electronic banking, also known as online banking, has revolutionized the traditional banking system by allowing customers to perform financial transactions remotely. It provides convenience, accessibility, and 24/7 availability, reducing the need for physical branches and paperwork. However, it also raises concerns regarding security, data privacy, and the potential exclusion of individuals without access to technology.
3. What are the main functions of a central bank?
Ans. The main functions of a central bank include controlling the money supply, regulating interest rates, acting as a lender of last resort, overseeing the stability of the financial system, and managing the country's foreign exchange reserves. Central banks also play a crucial role in formulating and implementing monetary policies to achieve macroeconomic objectives.
4. What is the role of credit rating agencies in the banking sector?
Ans. Credit rating agencies assess the creditworthiness of individuals, corporations, and governments by assigning ratings to their debt securities. These ratings help investors make informed decisions about investing in bonds, loans, and other financial instruments. In the banking sector, credit ratings influence the cost of borrowing for banks and their customers, impacting the availability of credit and overall financial stability.
5. How does globalization impact the banking and commerce sector?
Ans. Globalization has significantly impacted the banking and commerce sector by increasing cross-border trade, capital flows, and financial integration. It has led to the expansion of multinational banks, the development of international financial markets, and the emergence of new financial products. However, globalization has also exposed banks and businesses to greater risks, such as currency fluctuations, regulatory challenges, and financial contagion.
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