CUET Economics Chapter-Banking with Detailed explanation

  • Board
    CBSE
  • Textbook
    NCERT
  • Class
    Class 12
  • Subject
    Economics
  • Chapter
    CUET Economics Chapter-Banking with Detailed explanation
  • Chapter Name
    Banking
  • Category
    CUET (Common University Entrance Test) UG

Important MCQ Questions on CUET Economics Chapter-Banking with Detailed explanation

HT having an expert teacher of Economics prepared Important MCQ Questions on CUET Economics Chapter-Banking with Detailed explanations. All the Chapters in the syllabus of CUET Economics are covered with coverage of the entire syllabus. This page is prepared for Chapter-Banking and covers all important topics of the competitive exam CUET for domain subject test. Check out the chapter-wise CUET Economics MCQ questions. 

MCQ Questions for CUET Economics Chapter-Banking Set-1

Macroeconomic Economics - MCQ on Money and Banking

Class XII

Q.1.Money is

I. Generally acceptable

II. Means of exchange

III. Store of value.

IV. All

Answer:

IV.All

Explanation: Money can be defined as anything that is generally acceptable as a means of exchange and acts as a measure and as a store of value.

Q.2.The main characteristic of Money is:

I. General Acceptability

II. Medium of Exchange

III. Exchange of goods

IV. Store of Value

Answer:

I. General Acceptability

Explanation: All are the characteristics of Money but General Acceptability is the main characteristic because it is acceptable by everyone

Q.3.Cost incurred due to engagement in trade is called

I. Business Cost

II. Trading Cost

III. Capital

IV. Current Liability

Answer:

II.Trading Cost

Explanation: The cost incurred for involvement in trade is called Trading Cost

Q.4. Exchange of goods against goods is called

I. Trading

II. Barter System

III. Foreign exchange

IV. Exchange of goods and services with money

Answer:

II. Barter System

Explanation: Barter System is called exchange of goods with goods.

Q.5 The primary function of money is

I. Store of Value

II. Transfer of Value

III. Deferred Payment

IV. Medium of Exchange

Answer:

IV.Medium of Exchange

Explanation: Medium of exchange is the primary function of money others are secondary.

Q.6 What is legal tender money?

I. Store of value

II. Exchange of money between countries

III. Bound to accept in exchange of goods and services

IV. Legal money is cheque

Answer:

IV.Legal money is the money bound to accept in exchange of goods and services

Explanation: They cannot be refused by any citizen of the country for settlement of any kind of transaction.

Q.7.When currency notes are freely convertible into full bodied money is called

I. Inconvertible paper money

II. Convertible Paper money

III. Disposable Paper money

IV. Transferable Paper money

Answer:

II. Convertible Paper money

Explanation: The currency can be converted into full bodied money

Q.8. What is Fiat Money?

I. Convertible money

II. Money which can be exchanged

III. Money which circulates in command of government

IV. Money which can be exchanged from foreign currency

Answer:

II.Money which circulates in command of government

Explanation: Money which circulated on the fiat of the government

Currency notes and coins are therefore called fiat money.

Q.9. Sum of currency held by public is

I. M1

II. M2

III. M3

IV. M4

Answer:

I. M1

Explanation: M1 is Sum of currency held by public ,demand deposits in bank and other deposits with RBI

Q.10. Accepting deposits are a function of:

I. Insurance

II. Banking

III. SEBI

IV. RBI

Answer:

II. Banking

Explanation: The main functions of banks are to accept deposits

Q.11.Which is the Apex Institution of Banking

I. SEBI

II. Central Bank

III. State Bank

IV. None

Answer:

II.Central Bank

Explanation: It is the main body for banking which is called Reserve Bank of India

Q.12. Mention that types of deposits accepted by the banks from the public

I. Current Account Deposits

II. Saving Account Deposits

III. Fixed Deposits

IV. All

Answer:

IV.All

Explanation: All these deposits are accepted by banks

Q.13.M2 is

I. M1+ mutual funds’

II. M1+Insurance

III. M1+saving deposits with post office

IV. M1+saving deposits with banks

Answer:

M1+saving deposits with post office

Explanation: M1 is Sum of currency held by public ,demand deposits in bank and other deposits with RBI and saving deposits.

Q.14.What is excluded from M4

I. National saving Certificates

II. Insurance Certificates

III. Shares

IV. None

Answer:

I.National saving Certificates

Explanation:M4is total deposits with post office savings National saving certificates are deducted from M4

Q.15.What are the functions of Banking?

I. Accepting Deposit

II. Lending Money

III. Investment

IV. All

Answer:

IV.All

Explanation: Banking refers to the accepting for the purpose of lending or investment of deposits, money from the public, repayable on demand or otherwise and withdrawals by cheque, draft, and order.

Q.16.What are the secondary functions of money?

I. Medium of exchange

II. Measure of Value

III. Store of value

IV. All

Answer:

III. Store of value

Explanation: Money acts as a store of value. Value can be stored in the form of money .The value of money is more or less stable.

Q.17.What monetary system does India follow?

I. Maximum reserve system of note issue

II. Minimum reserve system of note issue

III. Same reserve system followed by other countries

IV. Transparent reserve system of note issue

Answer:

II.Minimum reserve system of note issue

Explanation: India follows a managed paper currency standard with a minimum reserve system of note issue.

Q.18.Who prints one rupee note?

I. President of India

II. Prime minister of India

III. Reserve of India

IV. Ministry of Finance

Answer:

Ministry of Finance

Explanation: One rupee note is printed by Ministry of Finance Govt of India

Q.19.Who prints currency other than one rupee?

I. President of India

II. Prime minister of India

III. Reserve of India

IV. Ministry of Finance

Answer:

III.Reserve of India

Explanation: Currency other than one rupee is printed by Reserve bank of India

Q.20.M3 includes

I. Saving deposit of post office

II. Net time deposits of bank

III. Total deposit with saving organization

IV. National Saving certificates

Answer:

Net time deposits of bank

Explanation:M3=M1+ Net time deposits of bank

MCQ Questions for CUET Economics Chapter-Banking Set-2

Q.21.Total stock of money of various kinds at any particular point of time

I. Money Demand

II. Money Supply

III. Money Exchange

IV. All

Answer:

Money Supply

Explanation:Money supply means the total stock at a particular point

Q.22.What is the main function of central bank

I. Control of Fiscal policy

II. Control of Monetary Policy

III. Control of demand and supply

IV. Control of store of value

Answer:

Control of Monetary Policy

Explanation:The design and control of monetary policy and regulating Banking functions is called

Q.23.Which of the following is a bank?

I. Post Office

II. LIC

III. UTI

IV. None Ans.UTI Explanation:UTI is a bank as it perform all the functions of bank

Q.24.Name the facility which a businessman gets in the current deposit account of the bank?

I. Cash Credit

II. Demand Loans

III. Short term Loans

IV. Overdraft

Answer:

Overdraft

Explanation:The businessman gets the facility of overdraft in the current accounts of the bank

Q.25.Name the instrument through which the commercial banks remit money at distant place?

I. Cheque

II. Overdraft

III. Demand Draft

IV. Short term loans

Answer:

Demand Draft

Explanation:Demand Draft ,mail transfers, telegraphic transfers are the instrument through which the commercial banks remit money at distant place

Q.26.Suppose we want to keep our money safe and earn interest In which type of deposit account we will keep our money in the bank?

I. Current Account

II. Saving Account

III. Fixed Deposit Account

IV. Recurring Account

Answer:

Fixed Deposit Account

Explanation:Fixed deposit accounts are for long term so comparatively they give a good interest rate.

Q.27.Name the institution which acts as a custodian of nation’s foreign exchange reserve

I. State Bank of India

II. Central Bank

III. Commercial Bank

IV. Foreign exchange Bank

Answer:

Central Bank

Explanation: Central Bank acts as a custodian of nations foreign exchange reserve

Q.28.What is to be deposited with central bank a percentage of their net demand and time liabilities

I. SRR

II. CRR

III. CDR

IV. SLR

Answer:

CRR

Explanation:Currency reserve ratio is a deposit with central bank by commercial bank of their net demand and time liabilities