This quiz works best with JavaScript enabled. Home > Finance > Economics > Monetary Economics > Monetary Economics – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Monetary Economics Quiz 3 (28 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. The symbol of currency was designed by A) Mahatma Gandhi. B) Dr.Ambedkar. C) D. Udaya Kumar. D) None of above. Show Answer Correct Answer: C) D. Udaya Kumar. 2. Which is an example of a progressive tax? A) Income tax. B) Sales tax. C) Sin tax. D) Social security. Show Answer Correct Answer: A) Income tax. 3. The average number of times that a dollar is spent in buying the total amount of final goods andservices produced during a given time period is known as A) Velocity. B) Gross national product. C) The money multiplier. D) The spending multiplier. Show Answer Correct Answer: A) Velocity. 4. When the federal government uses its spending and revenue to influence the economy A) Monetary Policy. B) Fiscal Policy. C) Keynesian Policy. D) Supply Side Policy. Show Answer Correct Answer: B) Fiscal Policy. 5. In India, coins are issued by A) State government. B) Ministry of finance. C) CBI. D) RBI. Show Answer Correct Answer: B) Ministry of finance. 6. In what way the Central Bank serves as a Banker's Bank? A) By acting as a lender of the last resort. B) By reducing the interest rates. C) By controlling currency. D) By maintaining gold reserve. Show Answer Correct Answer: A) By acting as a lender of the last resort. 7. Paper currency system us managed by the A) Central Government. B) Central Monetary authority. C) State Government. D) Banks. Show Answer Correct Answer: B) Central Monetary authority. 8. Derivative deposit in a commercial bank is also called A) Active deposit. B) Passive deposit. C) Primary deposit. D) None of the above. Show Answer Correct Answer: A) Active deposit. 9. Primary deposit in a commercial bank is called A) Active deposit. B) Passive deposit. C) Derivative deposit. D) All of the above. Show Answer Correct Answer: B) Passive deposit. 10. NABARD stands for A) National Bank for Agriculture and Research Developmen. B) National Bank for Analysis of Rural Development. C) National Bank for Agriculture and Rural Development. D) National Bank for Asian Development. Show Answer Correct Answer: C) National Bank for Agriculture and Rural Development. 11. India's first 'talking' ATM was launched by A) United Bank of India. B) ICICI Bank. C) Citi Bank. D) Union Bank of India. Show Answer Correct Answer: D) Union Bank of India. 12. Liquid form of assets A) Silver. B) Gold. C) Money. D) Bills of payment. Show Answer Correct Answer: C) Money. 13. A bank's reserve ratio is 10 percent and the bank has $ 2, 000 in deposits. Its reserves amount to A) $ 400. B) $ 200. C) $ 20. D) $ 1, 800. Show Answer Correct Answer: B) $ 200. 14. Unemployment is at an all-time high. The Fed should A) Increase interest on reserves. B) Decrease the reserve requirement. C) Sell bonds. D) None of above. Show Answer Correct Answer: B) Decrease the reserve requirement. 15. Why do we call a dollar a 'buck'? A) The first dollar was made from the skin of a male deer. B) George Washington's nickname was Buck. C) Buck was the artist that drew the design on the first paper money. D) In the frontier days, the pelt of a male deer was worth a dollar. Show Answer Correct Answer: D) In the frontier days, the pelt of a male deer was worth a dollar. 16. A bank's capacity to create credit is limited by the A) Size of cash. B) Size of its area. C) Size of the central bank. D) All of the above. Show Answer Correct Answer: B) Size of its area. 17. What tool does the Federal Reserve use most often to regulate the money supply? A) Discount rate. B) Open Market Operations. C) Budget Amendments. D) Money Creation. Show Answer Correct Answer: B) Open Market Operations. 18. If the reserve ratio is 5 percent, then $ 2, 500 of additional reserves can create up to A) $ 50, 000 of new money. B) $ 45, 600 of new money. C) $ 62, 500 of new money. D) $ 37, 500 of new money. Show Answer Correct Answer: A) $ 50, 000 of new money. 19. The ratio of money held by public in currency to that they hold in bank deposits A) SLR. B) CRR. C) CDR. D) RDR. Show Answer Correct Answer: C) CDR. 20. What is known as the most profitable asset of a commercial bank? A) Investment at call and short-notice. B) Loans and advances to its customers. C) Accepting deposits. D) None of the above. Show Answer Correct Answer: B) Loans and advances to its customers. 21. The term 'E Pluribus Unum' represents what? A) The year America was discovered. B) The pen used for the signature on all dollars. C) The original thirteen colonies. D) The one true great leader-George Washington. Show Answer Correct Answer: C) The original thirteen colonies. 22. The central banking functions in India are performed by the A) Punjab National Bank. B) State Bank of India. C) Reserve Bank of India. D) ICICI. Show Answer Correct Answer: C) Reserve Bank of India. 23. Value that is based on an opinion of a person, society, etc. is what type of value? A) Economic value. B) Subjective value. C) Intrinsic value. D) Speculative value. Show Answer Correct Answer: B) Subjective value. 24. Monetary policy resulting in higher interest rates and restricted access to credit; associated with a contraction of the money supply. A) Open market policy. B) Easy money policy. C) Tight money policy. D) Interest rate policy. Show Answer Correct Answer: C) Tight money policy. 25. Trading for things with other goods is called A) Negotiating. B) Bartering. C) Money. D) Stealing. Show Answer Correct Answer: B) Bartering. 26. Money as a medium of exchange is an A) Other function. B) Contingent function. C) Secondary function. D) Primary function. Show Answer Correct Answer: D) Primary function. 27. If the central bank wants to control credit, it should A) Raise cash reserve ratio. B) Lower the rediscount rate. C) Raise the bank rate. D) Buy securities in the open market. Show Answer Correct Answer: C) Raise the bank rate. 28. What is the official term for the HEAD side of the coin? A) Obverse. B) IPS (Important Person Side). C) Sunny-side up. D) Front. Show Answer Correct Answer: A) Obverse. ← PreviousRelated QuizzesEconomics QuizzesFinance QuizzesMonetary Economics Quiz 1Monetary Economics Quiz 2 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books