Monetary Economics Quiz 3 (20 MCQs)

Quiz Instructions

Select an option to see the correct answer instantly.

1. Money is the most liquid form of

Correct Answer: B) Capital.

2. Reserve Bank of India(RBI) was established on

Correct Answer: B) 1st April 1935.

3. The first form of monetary economics is

Correct Answer: C) Barter system.

4. Rate of interest is increased by RBI at times of:

Correct Answer: A) Lower inflation.

5. What is the science of coins called?

Correct Answer: A) Greed.

6. A bank can increase the supply of money by

Correct Answer: B) Creating credit.

7. Which of the following is not a quantitative method of credit control

Correct Answer: D) Regulation of consumer credit.

8. Currency notes are issued by

Correct Answer: B) RBI.

9. Paper currency system is managed by the

Correct Answer: B) Central monetary authority.

10. Money is .....

Correct Answer: B) Constant in purchasing power.

11. What is the term for the rate a person or organization must pay to borrow money from a bank?

Correct Answer: B) Interest Rate.

12. Which of the following metals is no longer used for making coins?

Correct Answer: B) Tin.

13. Which among these is not a monetary tool?

Correct Answer: B) Deficit financing.

14. The primary difference between commodity money and fiat money is that

Correct Answer: C) Commodity money has intrinsic value but fiat money does not.

15. Open Market Operation is

Correct Answer: A) Buying and selling of government securities.

16. How does the government NOT raise money?

Correct Answer: D) Printing more currency.

17. During inflation, who are gainer .....

Correct Answer: B) Wages and salary earners.

18. If the government wants to stimulate(speed up) the economy the Federal Reserve will

Correct Answer: A) Lower the discount rate.

19. What is the official term for the TAILS side of the coin?

Correct Answer: B) Reverse.

20. Fiscal policy requires the gov't to spend money on government projects in order to ..... economy.

Correct Answer: B) Expand.