This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 1 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Money whose value is based on the type of material from which it is made is called A) Commodity money. B) FIAT. C) Near money. D) Representative money. Show Answer Correct Answer: A) Commodity money. 2. In 1913, Congress created "the Fed" responsible for ..... A) Managing the budget. B) Regulating banks. C) Establishing trade agreements. D) None of above. Show Answer Correct Answer: B) Regulating banks. 3. Carl wants a new computer. He goes to 6 different stores on the weekend comparing prices. Carl is using money as A) A medium of exchange. B) Commodity money. C) A store of value. D) A unit of account. Show Answer Correct Answer: D) A unit of account. 4. Expenses that can or go up or down each month A) Variable Expenses. B) Merry-go-round Expenses. C) Shifty Expenses. D) Fixed Expenses. Show Answer Correct Answer: A) Variable Expenses. 5. Which one is the Bank of the Public? A) Commercial Bank. B) Central Bank. C) Both (a) and (b). D) None of the above. Show Answer Correct Answer: A) Commercial Bank. 6. Money is functioning as a standard of value when you A) Use it to compare two houses that are different prices. B) Buy jeans at the mall. C) Buy a rare baseball card that you expect will increase in value. D) Trade a cup of sugar for two eggs. Show Answer Correct Answer: A) Use it to compare two houses that are different prices. 7. The item must physically last and will not wear out too quickly to be useful as money A) Scarce. B) Divisible. C) Acceptable. D) Durable. Show Answer Correct Answer: D) Durable. 8. Two units of the same type of money must be the same in terms of what they will buy. A) Uniformity. B) Portability. C) Durability. D) Limited Supply. Show Answer Correct Answer: A) Uniformity. 9. A banking system that keeps only a small portion of deposits on hand and lends out the rest. A) Federal Deposit Insurance Corporation. B) Fractional Reserve Banking. C) Federal Reserve System. D) Credit Union. Show Answer Correct Answer: B) Fractional Reserve Banking. 10. Which of the following will increase money supply? A) Fall in repo rate. B) Purchase of securities in open market. C) Decrease in cash reserve ratio. D) All of these. Show Answer Correct Answer: D) All of these. 11. What is the value of money multiplier when initial deposits are ₹ 500 crores and LRR is 10 percent? A) 0.2. B) 10. C) 20. D) 0.1. Show Answer Correct Answer: B) 10. 12. An agreement to purchase or sell stocks for a specified price until a date in the future is reached A) Diversification. B) Mutual Fund. C) Default. D) Options. Show Answer Correct Answer: D) Options. 13. What is the annual percentage rate (APR) A) Annual rate (including fees) paid for borrowed money. B) Interest on a mortgage. C) A bank fee. D) All of the above. Show Answer Correct Answer: A) Annual rate (including fees) paid for borrowed money. 14. If the reserve requirement is 20%, the existence of $ 100 worth of excess reserves in the banking system can lead to a maximum expansion of the money supply equal to A) $ 500. B) $ 200. C) $ 750. D) $ 1000. Show Answer Correct Answer: A) $ 500. 15. The term used to describe the ease and speed with which you can convert savings or an investment to cash is: A) Convertibility. B) Principal. C) Rate of return. D) Liquidity. Show Answer Correct Answer: D) Liquidity. 16. Each of the following FED actions will contract the money supply except A) Raise the reserve ratio. B) Raise the discount rate. C) Raise the Federal Funds rate. D) Buy bonds. Show Answer Correct Answer: D) Buy bonds. 17. Which of the following refers to checks that have been written but not cashed? A) Cancelled check. B) Demand deposits. C) Outstanding checks. D) Bank statements. Show Answer Correct Answer: C) Outstanding checks. 18. The buying and selling of government bonds in financial markets is A) Monetary Policy. B) Responsibilities of the FED. C) Golden Standard. D) Open Market Operations. Show Answer Correct Answer: D) Open Market Operations. 19. Government-issued coins and paper notes that may be used to exchange goods and services; essentially, the physical representation of money A) Representative Money. B) Fiat Money. C) Commodity Money. D) Currency. Show Answer Correct Answer: D) Currency. 20. Which of the following is NOT a function money serves in the economy? A) Medium of exchange. B) Store of value. C) Standard of value. D) Value added commodity. Show Answer Correct Answer: D) Value added commodity. 21. In India there are four alternative measures of money supply:M1, M2, M3, and M4 of these M1= A) Currency with people. B) Currency with people+ Demand deposdit. C) Currency with people+ Demand deposdit+ Other deposit with RBI. D) None of these. Show Answer Correct Answer: C) Currency with people+ Demand deposdit+ Other deposit with RBI. 22. A collection of funds from many individuals and invested in stocks, bonds, and other assets A) Stock Split. B) Diversification. C) Stock. D) Mutual Fund. Show Answer Correct Answer: D) Mutual Fund. 23. When one share is divided into half or more (because the price has increased and deterred investors) A) Principal. B) Stock Split. C) Return. D) Interest. Show Answer Correct Answer: B) Stock Split. 24. The sale of an investment for less than its purchase price A) Options. B) Maturity. C) Capital Gain. D) Capital Loss. Show Answer Correct Answer: D) Capital Loss. 25. As his aunt's only beneficiary, he came ..... a fortune on her death. A) Across. B) Upon. C) Up against. D) Into. Show Answer Correct Answer: D) Into. 26. The current chairperson of the Federal Reserve is: A) Ben Bernanke. B) Alan Greenspan. C) Janet Yellen. D) Jerome Powell. Show Answer Correct Answer: D) Jerome Powell. 27. The currency created by the central bank is a part of A) Bank money. B) Money supply. C) Money. D) High powered money. Show Answer Correct Answer: D) High powered money. 28. To trade goods or services without the use of money is ..... A) Bartering. B) Economy. C) Debt. D) Trading. Show Answer Correct Answer: A) Bartering. 29. A U.S. government agency that provides insurance on customer's deposits in a bank account. A) Fractional Reserve Banking. B) Credit Union. C) Federal Reserve System. D) Federal Deposit Insurance Corporation. Show Answer Correct Answer: D) Federal Deposit Insurance Corporation. 30. Money that has value because the government has ordered that it is an acceptable means to pay debts A) Fiat Money. B) Representative Money. C) Commodity Money. D) Currency. Show Answer Correct Answer: A) Fiat Money. Next →Related QuizzesFinance QuizzesMoney And Banking Quiz 2Money And Banking Quiz 3Money And Banking Quiz 4Money And Banking Quiz 5Money And Banking Quiz 6Money And Banking Quiz 7Money And Banking Quiz 8Money And Banking Quiz 9Money And Banking Quiz 10 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books