This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 22 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 22 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. This is a moneyless economy that relies on the "mutual coincidence of wants" to trade A) Commodity Money. B) Specie. C) Barter. D) Fiat Money. Show Answer Correct Answer: C) Barter. 2. Money must be durable because ..... A) It has to last for at least a few months. B) It can't fall apart easily or it won't work as well. C) It needs to be small enough to fit in your pocket. D) None of above. Show Answer Correct Answer: B) It can't fall apart easily or it won't work as well. 3. An Investment in which investors pool their money to buy stocks and bonds A) Mutual Funds. B) Preferred Funds. C) Common Funds. D) Diverse Funds. Show Answer Correct Answer: A) Mutual Funds. 4. A money that can be saved without losing its value over time acts as a A) A fiat money. B) Medium of exchange. C) Store of value. D) Standard of value. Show Answer Correct Answer: C) Store of value. 5. High levels of unemployment combined with high levels of inflation could indicate that the business cycle has entered into a period of: A) Stagflation. B) Investment. C) Recession. D) Expansion. Show Answer Correct Answer: A) Stagflation. 6. The Value of credit multiplier will be high when Legal Reserve Ratio is: A) High. B) Zero. C) Low. D) Infinity. Show Answer Correct Answer: C) Low. 7. I don't have any cash just now. I'm ..... A) Less money. B) Flat broke. C) Flat broken. D) No money. Show Answer Correct Answer: B) Flat broke. 8. This is the price paid for borrowing money: A) Principal. B) Cost. C) Interest. D) Maturtity. Show Answer Correct Answer: C) Interest. 9. The rate at which central bank lends to commercial banks for long term requirements is called? A) SLR. B) CRR. C) Bank rate. D) None of above. Show Answer Correct Answer: C) Bank rate. 10. Currency and coins in circulation + checking deposits + travelers checks: A) M4. B) M3. C) M1. D) M2. Show Answer Correct Answer: C) M1. 11. Stephanie wants to deposit HK$ 300, 000 for two months in Hong Kong. Which of the following financial institutions can accept her deposit? (1) licensed banks(2) restricted licence banks(3) deposit-taking companies A) (1) only. B) (1) and (3) only. C) (2) and (3) only. D) (1), (2) and (3). Show Answer Correct Answer: A) (1) only. 12. Demand deposit include ( Choose the correct alternative) A) Saving account deposit and fixed deposits. B) Saving account deposits and current account deposit. C) Current account deposits and fixed deposits. D) All types of deposits. Show Answer Correct Answer: B) Saving account deposits and current account deposit. 13. What happens when you make a purchase using a credit card? A) The credit card issuer pays the store. B) The amount of the purchase is deducted from a prepaid account. C) The place where you made the purchases receives the money within 24 hours. D) The money is immediately deducted from your account. Show Answer Correct Answer: A) The credit card issuer pays the store. 14. Medium of exchange, store of value, and measure of value are all ..... A) Types of money. B) Measures of money. C) Functions of money. D) Characteristics of money. Show Answer Correct Answer: C) Functions of money. 15. If the total deposit created by commercial banks is Rs 20000 cr and LRR is 20%, then amount of initial deposit will be A) Rs 14000 cr. B) Rs 2000 cr. C) Rs 4000 cr. D) Rs 3000 cr. Show Answer Correct Answer: C) Rs 4000 cr. 16. An example of a stored value card is a (n) A) Credit card. B) Prepaid phone card. C) Mortgage. D) Debit card. Show Answer Correct Answer: B) Prepaid phone card. 17. All of the following are services provided by banks and other financial institutions EXCEPT A) Storing and saving money. B) Paying interest. C) Increasing the amount of money in circulation. D) Providing mortgages. Show Answer Correct Answer: C) Increasing the amount of money in circulation. 18. A bond will increase in value if A) Interest rates increase. B) The company files bankruptcy. C) Interest rates decrease. D) The government increases it's debt. Show Answer Correct Answer: C) Interest rates decrease. 19. Fiscal policy is carried out by: A) Congress and the President. B) The Federal Reserve. C) The PA Reserve Bank. D) The United Nations. Show Answer Correct Answer: A) Congress and the President. 20. As a form of money, pearls can better perform the function of a ..... than stamps because pearls are more ..... A) Store of value homogeneous. B) Unit of account divisible. C) Store of value durable. D) Unit of account portable. Show Answer Correct Answer: C) Store of value durable. 21. Demand deposits go into ..... A) Savings accounts. B) Mutual accounts. C) Checking accounts. D) None of above. Show Answer Correct Answer: C) Checking accounts. 22. If $ 1000 is deposited into a checking account and excess reserves increase by $ 700, the reserve ratio must be A) 30%. B) 40%. C) 70%. D) 90%. Show Answer Correct Answer: A) 30%. 23. Everyone must agree on the system being used A) Stability. B) Portability. C) Scarcity. D) Acceptability. Show Answer Correct Answer: D) Acceptability. 24. Money with intrinsic value that can have some other use is called A) Barter money. B) Fiat money. C) Commodity money. D) Token money. Show Answer Correct Answer: C) Commodity money. 25. Currency and coins in circulation + checking deposits + travelers checks PLUS near-moneys A) M4. B) M1. C) M2. D) M3. Show Answer Correct Answer: C) M2. 26. All of the following are examples of commodity money EXCEPT A) Cotton. B) An IOU. C) Salt. D) Precious gem stones. Show Answer Correct Answer: B) An IOU. 27. People have so many reasons to hold their money. Choose of the following situation to describe the reasons.I. To pay clinic billsII. To buy foods and drinksIII. To pay transportation servicesIV. To make a profitable investment A) I and II only. B) II and III only. C) III and IV only. D) All of the above. Show Answer Correct Answer: D) All of the above. 28. You receive money as payment for working at a grocery store. This best illustrates which function of money? A) Commodity money. B) Unit of account. C) Medium of exchange. D) Store of value. Show Answer Correct Answer: C) Medium of exchange. 29. Owners must apply for a ..... from the federal government. A) Loan. B) Charter. C) Savings account. D) Interest rate. Show Answer Correct Answer: B) Charter. 30. The cost of credit on a yearly basis, expressed as a percentage. A) ARM. B) DTI. C) Loan. D) APR. Show Answer Correct Answer: D) APR. ← 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