Monetary Economics Book Back Practice Test

12th Standard Economics — Monetary Economics: Book Back Online Practice Test

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The RBI Headquarters is located at

A.Delhi B.Chennai C.Mumbai D.Bengaluru

Money is

A.acceptable only when it has intrinsic value B.constant in purchasing power C.the most liquid of all assets D.needed for allocation of resources

Paper currency system is managed by the

A.Central Monetary authority B.State Government C.Central Government D.Banks

The basic distinction between M1 and M2 is with regard to

A.post office total deposits B.saving deposits with post office savings bank C.Terms deposits of banks D.currency

Irving Fisher's Quantity Theory of Money was popularized in

A.1908 B.1910 C.1911 D.1914

MV stands for

A.demand for money B.supply of legal tender money C.supply of bank money D.total supply of money

Inflation means

A.Prices are rising B.Prices are falling C.Value of money is increasing D.Prices are remaining the same

__________ inflation results in a serious depreciation of the value of money.

A.Creeping B.Walking C.Running D.Hyper

__________ inflation occurs when general prices of commodities increases due to increase in production costs such as wages and raw materials.

A.Cost-push B.Demand-pull C.Running D.Galloping

Q10

During inflation, who are the gainers?

A.Debtors B.Creditors C.Wage and salary earners D.Government

Q11

____________ is a decrease in the rate of inflation.

A.Disinflation B.Deflation C.Stagflation D.Depression

Q12

Stagflation combines the rate of inflation with

A.Stagnation B.Employment C.Output D.Price

Q13

The study of alternating fluctuations in business activity is referred to in Economics as

A.Boom B.Recession C.Recovery D.Trade cycle

Q14

During depression the level of economic activity becomes extremely

A.High B.Bad C.Low D.Good

Q15

"Money can be anything that is generally acceptable as a means of exchange and at the same time acts as a measure and a store of value." This definition was given by

A.Crowther B.A. C. Pigou C.F. A. Walker D.Francis Bacon

Q16

Debit card is an example of

A.currency B.paper currency C.plastic money D.money

Q17

Fisher's Quantity Theory of money is based on the essential function of money as

A.measure of value B.store of value C.medium of exchange D.standard of deferred payment

Q18

V in MV = PT equation stands for

A.Volume of trade B.Velocity of circulation of money C.Volume of transaction D.Volume of bank and credit money

Q19

When prices rise slowly, we call it

A.galloping inflation B.mild inflation C.hyper inflation D.deflation

Q20

___________ inflation is in no way dangerous to the economy.

A.walking B.running C.creeping D.galloping

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About this Monetary Economics test

This free online practice test covers Monetary Economics from the 12th Standard Economics (Samacheer Kalvi) syllabus. Choose the number of questions and an optional time limit, then answer and submit — everything is checked in your browser, with the correct answers and a worked explanation shown at the end. For the full solutions to every question in this set, see the solved MCQs page.

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