Multi-choice 1 Question 1. Which of the following is/are the components of money supply? Currency notes with the public Coins in circulation with the public Deposits with the banks Deposits of banks with the Central Bank Answers Option 1 Only I and II Option 2 Only I, II and III Option 3 Only II, III and IV Option 4 I, II, III and IV Feedback Wrong choice Incorrect selection Wrong choice Correct option Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 2. Which of the following system has been adopted by the RBI to issue currency notes? Answers Option 1 Simple deposited system Option 2 Proportional Reserve System Option 3 Minimum Reserve System Option 4 Fixed Fiduciary System Feedback Wrong choice Correct option Wrong choice Incorrect selection Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 3. Which of the following measure of money supply is termed as Reserve Money? Answers Option 1 Mo Option 2 M2 Option 3 M1 Option 4 M3 Feedback Correct option Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 4. Which of the following measure of money supply is termed as broad money ? Answers Option 1 M1 Option 2 M1 Option 3 M3 Option 4 M4 Feedback Incorrect selection Wrong choice Correct option Wrong choice Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 5. Which of following is a determinant of money supply? Stock of high powered money Actual reserve ratio of commercial banks Public’s desire to hold currency and deposit Answers Option 1 I, II and III Option 2 Only I Option 3 Only I and II Option 4 Only II and III Feedback Correct option Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 6. If H is high powered money, K is the currency deposit ratio, r is the desired deposit ratio and I is the quantity to total legal tenders, then value of money multiplier is Answers Option 1 Option 2 Option 3 Option 4 M = H (l+K).(r+K) Feedback Wrong choice Correct option Incorrect selection Wrong choice Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 7. Certain factors affect the money supply such as– Government borrowing from the banking sector Borrowing of the private or commercial sector from the banking sector. Changes in net foreign assets held by the central bank caused by changes in balance of payments. Government’s currency liability to the public Answers Option 1 Only I and II Option 2 Only I, II and III Option 3 Only II, III and IV Option 4 I, II, III and IV Feedback Wrong choice Incorrect selection Wrong choice Correct option Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 8. Credit creation is a function of Answers Option 1 Central Bank Option 2 Commercial Banks Option 3 Government Option 4 Co-operative credit societies Feedback Wrong choice Correct option Incorrect selection Wrong choice Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 9. Supply of money over a period of time is a function of– M (Quantum of money) V (Velocity of money) T (Number of transaction) Answers Option 1 Only I and II Option 2 Only II and III Option 3 I, II and III Option 4 Only I and III Feedback Correct option Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 10. Liquidity approach to the concept of money supply advocated by- Answers Option 1 Milton Friedman Option 2 The RBI Option 3 The Radcliffe Committee Option 4 Gurley and Shaw Feedback Wrong choice Incorrect selection Correct option Wrong choice Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback)
Multi-choice 1 Question 1. Which of the following is/are the components of money supply? Currency notes with the public Coins in circulation with the public Deposits with the banks Deposits of banks with the Central Bank Answers Option 1 Only I and II Option 2 Only I, II and III Option 3 Only II, III and IV Option 4 I, II, III and IV Feedback Wrong choice Incorrect selection Wrong choice Correct option Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 2. Which of the following system has been adopted by the RBI to issue currency notes? Answers Option 1 Simple deposited system Option 2 Proportional Reserve System Option 3 Minimum Reserve System Option 4 Fixed Fiduciary System Feedback Wrong choice Correct option Wrong choice Incorrect selection Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 3. Which of the following measure of money supply is termed as Reserve Money? Answers Option 1 Mo Option 2 M2 Option 3 M1 Option 4 M3 Feedback Correct option Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 4. Which of the following measure of money supply is termed as broad money ? Answers Option 1 M1 Option 2 M1 Option 3 M3 Option 4 M4 Feedback Incorrect selection Wrong choice Correct option Wrong choice Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Question 5. Which of following is a determinant of money supply? Stock of high powered money Actual reserve ratio of commercial banks Public’s desire to hold currency and deposit Answers Option 1 I, II and III Option 2 Only I Option 3 Only I and II Option 4 Only II and III Feedback Correct option Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 6. If H is high powered money, K is the currency deposit ratio, r is the desired deposit ratio and I is the quantity to total legal tenders, then value of money multiplier is Answers Option 1 Option 2 Option 3 Option 4 M = H (l+K).(r+K) Feedback Wrong choice Correct option Incorrect selection Wrong choice Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 7. Certain factors affect the money supply such as– Government borrowing from the banking sector Borrowing of the private or commercial sector from the banking sector. Changes in net foreign assets held by the central bank caused by changes in balance of payments. Government’s currency liability to the public Answers Option 1 Only I and II Option 2 Only I, II and III Option 3 Only II, III and IV Option 4 I, II, III and IV Feedback Wrong choice Incorrect selection Wrong choice Correct option Solution Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Question 8. Credit creation is a function of Answers Option 1 Central Bank Option 2 Commercial Banks Option 3 Government Option 4 Co-operative credit societies Feedback Wrong choice Correct option Incorrect selection Wrong choice Solution Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Question 9. Supply of money over a period of time is a function of– M (Quantum of money) V (Velocity of money) T (Number of transaction) Answers Option 1 Only I and II Option 2 Only II and III Option 3 I, II and III Option 4 Only I and III Feedback Correct option Wrong choice Incorrect selection Wrong choice Solution Correct Option (Feedback) Wrong (Feedback) Wrong (Feedback) Wrong (Feedback) Question 10. Liquidity approach to the concept of money supply advocated by- Answers Option 1 Milton Friedman Option 2 The RBI Option 3 The Radcliffe Committee Option 4 Gurley and Shaw Feedback Wrong choice Incorrect selection Correct option Wrong choice Solution Wrong (Feedback) Wrong (Feedback) Correct Option (Feedback) Wrong (Feedback)
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