Monetary Economics One Mark Online Test

Monetary Economics One Mark Online Test (12th Standard Economics)

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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

Q21

Which economist defined money with the simple phrase, "Money is, what money does"?

A.Crowther B.Walker C.Irving Fisher D.J.M. Keynes

Q22

According to the historical evolution of trade, which ancient tribe first introduced the barter system around 6000 BC?

A.Phoenicians B.Babylonians C.Mesopotamian tribes D.Romans

Q23

Under the metallic standard, what is the relationship between the face value and the intrinsic metal value of standard coins?

A.Face value is less than intrinsic value B.Face value is equal to intrinsic value C.Face value is greater than intrinsic value D.There is no relationship between the two values

Q24

Which of the following is classified as a primary function of money?

A.Standard of deferred payments B.Store of value C.Measure of value D.Transfer of purchasing power

Q25

When money is used to transfer capital from less productive to more productive uses, which function is it performing?

A.Primary function B.Secondary function C.Contingent function D.Static function

Q26

In the estimation of money supply by the Reserve Bank of India, what constitutes M3?

A.M1 + Savings deposits with post office savings banks B.M2 + Time deposits of all commercial and cooperative banks C.M1 + Time deposits of all commercial and cooperative banks D.M3 + Total deposits with post offices

Q27

What does the Cash Reserve Ratio (CRR) refer to in the context of money supply determinants?

A.The ratio of money held by the public in currency to bank deposits B.The fraction of deposits banks must keep with the RBI C.The fraction of deposits banks must keep in the form of liquid assets D.The ratio of vault cash to deposits of commercial banks

Q28

The unique Indian Rupee symbol, selected by the Union Cabinet on July 15, 2010, is an amalgamation of which scripts?

A.Devanagri 'Ra' and Roman 'R' without the stem B.Sanskrit 'Ra' and Greek 'R' with the stem C.Devanagri 'Ra' and Greek 'R' without the stem D.Sanskrit 'Ra' and Roman 'R' with the stem

Q29

Which of the following is Marshall's algebraic equation representing the Cambridge Cash Balances Approach?

A.MV = PT B.M = KPY C.n = pk D.p = n / k

Q30

In Keynes's cash balance equation n = pk, what does the variable 'k' represent?

A.The total supply of money B.The general price level of consumer goods C.The total quantity of consumption units people keep in cash D.The cash reserve ratio of banks

Q31

When the annual rate of inflation rises moderately into a single digit of 3% to 9%, it is classified as which type of inflation?

A.Creeping inflation B.Running inflation C.Walking inflation D.Galloping inflation

Q32

Which type of inflation is caused by the hoarding of goods and black marketing, leading to a sudden fall in supply?

A.Credit inflation B.Profit-induced inflation C.Scarcity-induced inflation D.Tax-induced inflation

Q33

Who among the following benefits or gains during a period of high inflation?

A.Creditors B.Debtors C.Fixed-income groups D.Long-term bond investors

Q34

Which of the following is a qualitative or selective method used by central banks to control credit?

A.Bank Rate Policy B.Open Market Operations C.Variable Reserve Ratio D.Moral Suasion

Q35

In the study of trade cycles, what is the extreme lowest point of a depression phase called?

A.Boom B.Recession C.Trough D.Recovery

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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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