This quiz works best with JavaScript enabled. Home > Finance > Money And Banking > Money And Banking – Quiz 4 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Money And Banking Quiz 4 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Why would a person invest in junk bonds? A) Junk bonds have high bond ratings. B) Most junk bonds have low interests rates. C) He does not know anything about investment. D) Junk bonds can pay very high interest rates. Show Answer Correct Answer: D) Junk bonds can pay very high interest rates. 2. Advocates of supply-side economics argue that spending by the federal government ..... . A) Has no effect on economic growth. B) Can crash the economy completely. C) Slows economic growth. D) Helps stimulate economic growth. Show Answer Correct Answer: C) Slows economic growth. 3. All the following are characteristics of money EXCEPT A) Durability. B) Divisibility. C) Uniformity. D) Accountability. Show Answer Correct Answer: D) Accountability. 4. Which of the following refers to the payee's signature on the back of the check? A) Endorsement. B) Signature card. C) Bank statement. D) Check register. Show Answer Correct Answer: A) Endorsement. 5. 'Money enables people to borrow and lend'. Which function of money does this describe? A) Measure of value. B) Medium of exchange. C) Standard for deferred payment. D) Store of value. Show Answer Correct Answer: C) Standard for deferred payment. 6. The currency the Federal Reserve puts into circulation is called ..... or is paper money. A) Federal Paper. B) Federal Reserved Notes. C) Federal Cash. D) Federal Coins. Show Answer Correct Answer: B) Federal Reserved Notes. 7. The item used must have a standard appearance so that it is recognised and seen to represent an agreed fixed amount A) Uniform. B) Scarce. C) Durable. D) Acceptable. Show Answer Correct Answer: A) Uniform. 8. Which is the most liquid measure of the money supply? A) M1. B) M3. C) M2. D) M4. Show Answer Correct Answer: A) M1. 9. Credit control means- A) Contraction of credit only. B) Extension of credit only. C) Extension and contraction of money supply. D) None of these. Show Answer Correct Answer: C) Extension and contraction of money supply. 10. Money supply is ..... concept A) Stock. B) Flow. C) Variable. D) All the above. Show Answer Correct Answer: A) Stock. 11. The fact that money must withstand the wear and tear that comes from being used over and over again is a measure of its A) Portability. B) Age. C) Durability. D) Currency. Show Answer Correct Answer: C) Durability. 12. What does the New York Stock Exchange do? A) Buys and sells stocks but not bonds for wealthy private investors. B) Handles stock and bond trading on the Internet only. C) Arranges stock and bond trading of many large and established companies. D) Arranges the buying and slling of blue chip stocks only. Show Answer Correct Answer: C) Arranges stock and bond trading of many large and established companies. 13. Which of the following is one of the three FUNCTIONS of money? A) Divisibility. B) Portability. C) Scarcity. D) Store of value. Show Answer Correct Answer: D) Store of value. 14. Which of the following agency is responsible for issuing Rs 1 currency note in India? A) Ministry of commerce. B) Ministry of finance. C) RBI. D) Niti aayog. Show Answer Correct Answer: B) Ministry of finance. 15. Money is expected to have value and be used by all to make purchases. A) Uniformity. B) Divisibility. C) Durability. D) Acceptability. Show Answer Correct Answer: D) Acceptability. 16. Name the credit control method which refers to difference between the amount of loan and market value of the security offered by the borrower against the loan. A) Margin Requirement. B) Direct Action. C) Moral Suasion. D) Legal Reserve Requirement. Show Answer Correct Answer: A) Margin Requirement. 17. An institution for receiving, keeping and lending money A) Bond. B) Stock. C) Company. D) Bank. Show Answer Correct Answer: D) Bank. 18. You'll have to go into the bank if you want money, the cash machine isn't ..... correctly. A) Exercising. B) Practising. C) Functioning. D) Serving. Show Answer Correct Answer: C) Functioning. 19. All units of money must be identical so that people recognize it. A) Unit of Account. B) Uniformity. C) Portability. D) Divisibility. Show Answer Correct Answer: B) Uniformity. 20. The largest and most changeable part of the money supply is ..... A) Currency. B) Interest payments. C) Demand deposits. D) None of above. Show Answer Correct Answer: C) Demand deposits. 21. Institution that accepts deposits for lending purpose is known as ..... A) Government. B) Commercial Bank. C) Central Bank. D) Public. Show Answer Correct Answer: B) Commercial Bank. 22. Emilio borrows $ 1200 from a bank with 8% simple interest per year. How much will he have to pay back total in 2 years? (I=prt, then add I to p to get the answer) A) $ 192. B) $ 1392. C) $ 1350. D) $ 150. Show Answer Correct Answer: B) $ 1392. 23. Money enables people to save. Which function of money does this describe? A) Medium of exchange. B) Store of value. C) Unit of account. D) Standard for deferred payments. Show Answer Correct Answer: B) Store of value. 24. The security feature in U.S. money that has been the most difficult to counterfeit. A) Tinting the paper. B) Watermarks. C) Security Strip. D) All of the above. Show Answer Correct Answer: C) Security Strip. 25. Which of the following is described by these characteristics:one seller, barriers to entry, no product differentiation A) Monopoly. B) Oligopoly. C) Monopolistic competition. D) Pure competition. Show Answer Correct Answer: A) Monopoly. 26. Which of the following would improve your credit score? A) Keeping credit card balances as high as possible. B) Checking credit cards regularly. C) Consolidating credit cards. D) Paying off all debts. Show Answer Correct Answer: D) Paying off all debts. 27. Divisibility means that money can be easily divided into A) Smaller units of value. B) Currency and coins. C) Representative money and fiat money. D) Different units of exchange. Show Answer Correct Answer: A) Smaller units of value. 28. People make money by discounting bonds, how? A) The company's rating dropped. B) The interest rate. C) The value of the Bond increased. D) Buying the Bond for less than the other person paid for it. Show Answer Correct Answer: D) Buying the Bond for less than the other person paid for it. 29. A bank can only lend out it's A) Total checkable deposits. B) Excess reserves. C) Actual reserves. D) Required reserves. Show Answer Correct Answer: B) Excess reserves. 30. Which of the following is not the main forms of money? A) Bank deposits. B) Cash. C) Central bank reserves. D) Gift certificate. Show Answer Correct Answer: D) Gift certificate. ← PreviousNext →Related QuizzesFinance QuizzesMoney And Banking Quiz 1Money And Banking Quiz 2Money And Banking Quiz 3Money 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