Money and Financial System CDS Questions

CDS Economy

Money and Financial System MCQ Questions


7.
What is the main purpose of Cash Reserve Ratio (CRR)?
A.
To ensure liquidity in banks
B.
To control inflation
C.
To increase lending rates
D.
To monitor non-performing assets
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ANSWER :
A. To ensure liquidity in banks
8.
What is the function of the statutory liquidity ratio (SLR)?
A.
To manage credit growth
B.
To ensure banks maintain a reserve of liquid assets
C.
To reduce inflation
D.
To control foreign exchange rates
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ANSWER :
B. To ensure banks maintain a reserve of liquid assets
9.
Which of these is NOT a quantitative tool of monetary policy?
A.
CRR
B.
SLR
C.
Moral suasion
D.
Open market operations
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ANSWER :
C. Moral suasion
10.
What does 'fiat money' refer to?
A.
Money with intrinsic value
B.
Money backed by gold
C.
Currency declared legal tender by government
D.
Digital currency
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ANSWER :
C. Currency declared legal tender by government
11.
What is the primary difference between a barter system and a monetary system?
A.
Barter involves direct exchange of goods; money acts as a medium of exchange
B.
Barter uses currency, monetary system does not
C.
Barter involves multiple parties, monetary system does not
D.
Barter requires government intervention, monetary system does not
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ANSWER :
A. Barter involves direct exchange of goods; money acts as a medium of exchange
12.
Which of these is a characteristic of money?
A.
Intrinsic value
B.
Universal acceptability
C.
Limited supply
D.
Direct usage as a good
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ANSWER :
B. Universal acceptability