Economics Objective Questions – Chapter 8 – Money

Economics Objective Questions, which are covered in this chapter, relate to the topic, Money. Economics Objective Questions contains 17 questions. Answers to Economics Objective Questions are available after clicking on the answer.

1.Broad Money refers to _______:

(a) M1

(b) M2

(c) M3

(d) M4

Answer

Answer: (c) M3


 

2.Which of the following measures of money supply is considered narrow concept of money supply?

(a) M1

(b) M2

(c) M3

(d) M4

Answer

Answer: (a) M1


 

3.Bills of exchange are sometimes known as:

(a) Near money

(b) Transferable assets

(c) Claims receivable

(d) Business obligations

Answer

Answer: (A) Near money


 

4.The issue of one rupee currency note in India is the liability of the:

(a) Issue Department of the RBI

(b) Government of India

(c) State Bank of India

(d) Banking Department of the RBI

Answer

Answer: (b) Government of India


 

Economics Objective Questions – Money

5.M2 is defined as:

(a) M1 + net time deposits

(b) M1 + total deposit with post office

(c) M1 + saving deposit with post office

(d) Currency plus demand deposits in banks

Answer

Answer: (c) M1 + saving deposit with post office





6.Which of the following will not come under narrow money?

(a) Currency in circulation

(b) Demand Deposit

(c) Time Deposit

(d) None of these

Answer

Answer: (c) Time Deposit


 

7.M3 is:

(a) Currency with public + demand deposits of the public

(b) M1 + M2

(c) M1 + Time deposits of the public with bank

(d) All of these

Answer

Answer: (c) M1 + Time deposits of the public with bank


 

8.M1 = _________ + Deposits with public

(a) Currency

(b) Term deposits

(c)  Post office savings

(d) None of these.

Answer

Answer: (A) Currency


 

9.Which of the following is money proper?

(a) Bonds

(b) Government securities

(c) Time deposits

(d) Currency notes and demand deposits.

Answer

Answer: (d) Currency notes and demand deposits.


 

Economics Objective Questions – Money

10.Which of the following shows the meaning of the term M3?

(a) M1 + post office savings deposits.

(b) Currency + coins + demand deposits of banks

(c) M1 + Time Deposits of Banks.

(d) None of the above.

Answer

Answer: (c) M1 + Time Deposits of Banks.


 

11.Money in static sense, refers to:

(a) A store of Value

(b) Medium of Exchange

(c) Standard of deferred payments

(d) All of above.

Answer

Answer: (d) All of the above





12.The difference between narrow money and broad money is.

(a) Coins and currency

(b) Currency

(c) Saving deposits of Banks

(d) Time deposits with banks.

Answer

Answer:(d) Time deposits with banks.


 

13.Measurement of value of all goods and services refers to which of the following functions of money?

(a) Medium of Exchange

(b) Unit of account

(c) Standard of Deferred payment

(d) Store of value.

Answer

Answer: (b) Unit of account


 

Economics Objective Questions – Money

14.Money is most liquid of all assets because _______.

(a) It has portability

(b) It can be easily stored

(c) It is readily convertible into other assets

(d) It is generally acceptable

Answer

Answer: (c) It is readily convertible into other assets


 

15.Which of the following shows the meaning of M3?

(a) M1 + Post office saving deposits

(b) Currency + coins + demand deposits of banks

(c) M1 + time deposit of public with bank

(d) None of these.

Answer

Answer: (c) M1 + time deposit of public with bank


 

16.Which among the following is the static function of money?

(a) Store of value

(b) Medium of exchange

(c) Standard of deferred Payments

(d) All of the above.

Answer

Answer: (d) All of the above


 

17.Measurement of value of all goods and services refers to which of the following functions of money:

(a) Medium of exchange

(b) Unit of Account

(c) Standard of deferred Payments

(d) Store of value.

Answer

Answer: (b) Unit of Account


 

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