This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 21 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 21 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which is the main aim of a commercial bank? A) To act as banker to goverment. B) To issue bank note. C) To make profit. D) To manage the national debt. Show Answer Correct Answer: C) To make profit. 2. How do production costs affect aggregate supply? A) Aggregate supply increases when production costs decrease. B) Aggregate supply decreases when production costs decrease. C) Aggregate supply increases when production costs increase. D) Aggregate supply decreases when production costs remain the same. Show Answer Correct Answer: A) Aggregate supply increases when production costs decrease. 3. Many elderly people have to live on the money they ..... when they were working. A) Put back. B) Laid up. C) Set up. D) Put aside. Show Answer Correct Answer: D) Put aside. 4. Which bank operate in public interest without profit motive A) SBI. B) UBI. C) PNB. D) RBI. Show Answer Correct Answer: D) RBI. 5. Credit cards are:i. a generally accepted form of payment and therefore part of M1.ii. are included in M1 because you write a check to pay your monthly bill.iii. a means of borrowing money. A) I only. B) I and iii. C) Ii only. D) I and ii. E) Iii only. Show Answer Correct Answer: E) Iii only. 6. Why is using coins as money easier than using gold bars? A) Coins are more portable. B) Coins are more limited in supply. C) Coins are more uniform. D) Coins are more durable. Show Answer Correct Answer: A) Coins are more portable. 7. How useful cacao beans might be as money today / could be cumbersome or unacceptable. A) Medium of exchange. B) Standard of value. C) Store of value. D) None of above. Show Answer Correct Answer: A) Medium of exchange. 8. If the RR is 5 %, what is the money multiplier? A) 5. B) 10. C) 50. D) 20. Show Answer Correct Answer: D) 20. 9. ..... is anything accepted in exchange for goods and services. A) Barter. B) Money. C) Currency. D) None of above. Show Answer Correct Answer: B) Money. 10. Of the reasons listed below, why does the FED NOT keep reserves? A) Loan money to other banks. B) Pay back the national debt. C) Maintain wealth. D) Use money for emergencies (like hurricanes/earthquakes). Show Answer Correct Answer: B) Pay back the national debt. 11. A type of money that has value because it can be exchanged for something else of value (ex. gold). A) Commodity money. B) Fiat money. C) Certificate money. D) Representative money. Show Answer Correct Answer: D) Representative money. 12. What are the 3 functions of money? A) Get rich influence people and flaunt. B) Medium of exchange standard of valuestore of value. C) It doesn't have a function. D) Deposit withdrawal interest. Show Answer Correct Answer: B) Medium of exchange standard of valuestore of value. 13. Our money is valuable because of ..... A) It's worth. B) The government. C) Both. D) None of above. Show Answer Correct Answer: C) Both. 14. A function of money is to act as a measure of value. What does this mean? A) It is used to compare the worth of different goods. B) It is used for future savings. C) It is used to enable monthly payments for expensive goods. D) It is used to pay the price of a good. Show Answer Correct Answer: A) It is used to compare the worth of different goods. 15. What is a function of a central bank? A) Controlling money supply. B) Deciding on the amount of government expenditure. C) Raising taxes. D) Issuing shares. Show Answer Correct Answer: A) Controlling money supply. 16. Items that are used as money must be capable of being used as smaller and smaller denominations so as to enable a range of different values to be represented by the item being used. A) Divisible. B) Scarce. C) Acceptable. D) Uniform. Show Answer Correct Answer: A) Divisible. 17. Which would be the best inflation rate? A) -4%. B) 3%. C) 15%. D) None of above. Show Answer Correct Answer: B) 3%. 18. If you sell something and choose not to spend the money earned right away, the money is acting as a A) Unit of Account. B) Store of Value. C) Medium of Exchange. D) Demand Deposit. Show Answer Correct Answer: B) Store of Value. 19. What percentage of banks failed in 1980? A) 30%. B) 20%. C) 80%. D) 50%. Show Answer Correct Answer: B) 20%. 20. The Federal Reserve System was officially established in A) 1836. B) 1790. C) 1811. D) 1913. Show Answer Correct Answer: D) 1913. 21. Which of these tools in an example of monetary policy? A) Reducing income taxes. B) Changing reserve requirements. C) Increasing government spending. D) Borrowing money through deficit spending. Show Answer Correct Answer: B) Changing reserve requirements. 22. The definition of Commodity Money can best be described as ..... A) Paper money distributed by the U.S. government. B) Object that has intrinsic value in itself that also serves as money. C) Money in the form of cash and coin. D) Printed money from State banks. Show Answer Correct Answer: B) Object that has intrinsic value in itself that also serves as money. 23. Money can be used to settle accounts in the future and this function is referred to as ..... A) Measure of value. B) Store of value. C) Standard of deferred payment. D) Unit of value. Show Answer Correct Answer: C) Standard of deferred payment. 24. Divisibility of money is an important characteristic because ..... A) It can't easily deteriorate. B) You need to be able to get change when it is more that the price of the good. C) It needs to be recognizable. D) None of above. Show Answer Correct Answer: B) You need to be able to get change when it is more that the price of the good. 25. Since bonds are considered among the safest investments, you would expect that they would A) Take a ling time to mature. B) Have high interest rates. C) Have low interest rates. D) Muture quickly. Show Answer Correct Answer: C) Have low interest rates. 26. Which of the characteristics of money can be defined as "easily moved" ? A) Divisibility. B) Uniformity. C) Durability. D) Portability. Show Answer Correct Answer: D) Portability. 27. If the Fed increases the money supply, the economy will see A) A decrease in price level and an increase in real GDP. B) An decrease in price level and a decrease in real GDP. C) An increase in price level and a decrease in real GDP. D) An increase in price level and an increase in real GDP. Show Answer Correct Answer: D) An increase in price level and an increase in real GDP. 28. Penny is an artist and John is a carpenter. Penny agrees to paint a portrait of John's family in exchange for a handmade table created by John. How did Penny and John pay for the goods in their transaction? A) Through bartering. B) With money. C) Using a store of value. D) With currency. Show Answer Correct Answer: A) Through bartering. 29. A card authorizing the holder to buy goods or services A) Principal. B) Mortgage. C) Interest. D) Credit Card. Show Answer Correct Answer: D) Credit Card. 30. All of the following are examples of financial intermediaries EXCEPT A) A finance company. B) A credit union. C) A stock certificate. D) A life insurance company. Show Answer Correct Answer: C) A stock certificate. ← PreviousNext →Related QuizzesFinance QuizzesMoney And Banking Quiz 1Money 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 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books