This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 23 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 23 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following function is not performed by the central bank? A) Overdraft facility. B) Controller of money supply. C) Banker to the government. D) Banker's Bank. Show Answer Correct Answer: A) Overdraft facility. 2. Which financial product typically pays the highest rate of interest? A) Common stock. B) Certificate of deposit. C) Savings account. D) Money market account. Show Answer Correct Answer: B) Certificate of deposit. 3. What does the term limited life mean? A) The business does not continue if the owner leaves . B) There are many regulations about business activities. C) The business is restricted in size. D) There is a ceiling on the amount of business expenses. Show Answer Correct Answer: A) The business does not continue if the owner leaves . 4. One of the economic properties of money is A) Scarcity. B) Uniformity. C) Durability. D) Divisibility. Show Answer Correct Answer: A) Scarcity. 5. Supply of money refers to quantity of money A) As on any point of time. B) As on 31st march. C) During period of time. D) During fiscal year. Show Answer Correct Answer: A) As on any point of time. 6. Which of the following is not something that you fill out on a check? A) The date. B) Your signature. C) Your birthdate. D) Who the check is made payable to. Show Answer Correct Answer: C) Your birthdate. 7. The rate is given as a percent (%). Before using it in the simple interest formula, you must first convert it to a ..... A) Fraction. B) Decimal. C) Dollar amount. D) Ratio. Show Answer Correct Answer: B) Decimal. 8. Which of the following condition needed for financial institution become a bank A) Accepting deposit. B) Advancing loans. C) Both. D) None of these. Show Answer Correct Answer: C) Both. 9. The architect's work was superb, but he charged an enormous ..... A) Subscription. B) Ticket. C) Fare. D) Fee. Show Answer Correct Answer: D) Fee. 10. How does a bank make most of its profits? A) Collects fees on safe deposit boxes. B) By paying out less in interest on deposits than it earns in interest on loans. C) Federal funding. D) Collects fees from credit card purchases. Show Answer Correct Answer: B) By paying out less in interest on deposits than it earns in interest on loans. 11. Deposits earn interest A) Savings. B) Checking. C) Money market. D) Mortgage. Show Answer Correct Answer: A) Savings. 12. Which of following is not included in M1 A) Inter bank deposits. B) Currency and coins with public. C) Other deposits with RBI. D) Demand deposits with banks. Show Answer Correct Answer: A) Inter bank deposits. 13. The central bank is ..... authority A) Illegal. B) Monetary. C) Public. D) Private. Show Answer Correct Answer: B) Monetary. 14. Suppose that Captain Crunch bank has a customer deposit $ 5, 000 and the bank's excess reserves go up by $ 4, 000. The reserve ratio is A) 20%. B) 10%. C) 40%. D) $ 1000. Show Answer Correct Answer: A) 20%. 15. All of the following are examples of predatory lenders EXCEPT: A) Check cashing stores. B) Payday lenders. C) Pawn shops. D) Credit unions. Show Answer Correct Answer: D) Credit unions. 16. Paper money that has no intrinsic value is referred to as A) Federal money. B) Curved money. C) Fiat money. D) Commodity money. Show Answer Correct Answer: C) Fiat money. 17. ..... is what money is doing when it serves as payment for goods or services. A) Barter. B) Currency. C) Medium of exchange. D) None of above. Show Answer Correct Answer: C) Medium of exchange. 18. What is the term for a business that is co-owned by two or more people who agree on how responsibilities, profits, and losses will be divided? A) Limited liability partnership. B) Limited partnership. C) Partnership. D) General partnership. Show Answer Correct Answer: C) Partnership. 19. When money is used to acquire goods and services, it is functioning as a A) Medium of exchange. B) Store of value. C) Standard of account. D) Equation of value. Show Answer Correct Answer: A) Medium of exchange. 20. Maximum credit that commercial bank can legally create depends on their A) SLR. B) Gold Reserve. C) Legal reserve ratio( LRR). D) CRR. Show Answer Correct Answer: C) Legal reserve ratio( LRR). 21. Which is a main goal of the Federal Reserve? A) Develop new laws for the United States. B) Create a high level of inflation. C) Print currency for American citizens. D) Create a stable, healthy economy. Show Answer Correct Answer: D) Create a stable, healthy economy. 22. The terms proportional, progressive, and regressive refer to ..... A) Goals of tax reform. B) Principles of taxation. C) Criteria for effective taxes. D) Types of taxes. Show Answer Correct Answer: D) Types of taxes. 23. This is when the FED allows the money supply is allowed to grow and interest rates fall. This stimulates should stimulate the economy. A) Easy Money Policy. B) Tight Money Policy. C) Financial Policy. D) Monetary Policy. Show Answer Correct Answer: A) Easy Money Policy. 24. The biggest problem associated with representative money is A) Fluctuations in the value of the backing commodity. B) Difficulty in transporting it. C) Lack of agreement about exchange rate. D) Di strust of the issuing government. Show Answer Correct Answer: A) Fluctuations in the value of the backing commodity. 25. In the 1990s, the Russian people lost confidence in the value of the ruble, and many were no longer willing to sell goods and services in exchange for Russian currency. Which characteristic of money did the Russian currency lack? A) Acceptability. B) Uniformity. C) Limited supply. D) Durability. Show Answer Correct Answer: A) Acceptability. 26. Money that has value simply because the government says it does is called ..... A) Representative money. B) Credit. C) Currency. D) Fiat money. Show Answer Correct Answer: D) Fiat money. 27. What is NOT one of the three main functions of money? A) Store of Value. B) Medium of Exchange. C) Unit of Account. D) Durability. Show Answer Correct Answer: D) Durability. 28. Troy has $ 50 a month transferred electronically from his checking account to his savings account. This is an example of: A) An installment payment. B) A savings plan. C) An ATM transaction. D) A debit card transaction. Show Answer Correct Answer: B) A savings plan. 29. A commercial bank has two conflicting goals; A) Interest payments and interest accrual. B) Liabilities and assets. C) Money creation and money destruction. D) Profits and liquidity. Show Answer Correct Answer: D) Profits and liquidity. 30. If a central bank significantly increases its sales of government bonds, it is most likely responding to which of the following? A) Slow economic growth. B) An appreciating domestic currency. C) Rising unemployment. D) High inflation rates or Hyperinflation. Show Answer Correct Answer: D) High inflation rates or Hyperinflation. ← 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