Money and Financial System CDS Questions

CDS Economy

Money and Financial System MCQ Questions


1.
What is the primary function of money in an economy?
A.
Medium of exchange
B.
Unit of account
C.
Store of value
D.
All of the above
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ANSWER :
D. All of the above
2.
What is meant by 'barter system'?
A.
Exchange of goods using money
B.
Direct exchange of goods without money
C.
Trading only perishable goods
D.
Exchange using digital currency
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ANSWER :
B. Direct exchange of goods without money
3.
What causes the demand for money to increase?
A.
Decrease in income
B.
Low savings rate
C.
Higher interest rates
D.
Increase in income
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ANSWER :
D. Increase in income
4.
What is 'high-powered money'?
A.
Currency issued by commercial banks
B.
Currency issued by the central bank
C.
Digital money
D.
Cheques issued by banks
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ANSWER :
B. Currency issued by the central bank
5.
Which institution is responsible for issuing currency in India?
A.
Commercial banks
B.
Reserve Bank of India
C.
Ministry of Finance
D.
State Bank of India
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ANSWER :
B. Reserve Bank of India
6.

Match the following:

List I List II
a) Medium of exchange 1.) Standard for pricing
b) Store of value 2.) Saves wealth for future
c) Unit of account 3.) Facilitates transactions
A.

a-1, b-2, c-3

B.

a-3, b-1, c-2

C.

a-3, b-2, c-1

D.

a-1, b-3, c-2

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ANSWER :

C. a-3, b-2, c-1