Money and Financial System CDS Questions

CDS Economy

Money and Financial System MCQ Questions


7.
The functions of money are traditionally classified into primary and secondary functions. The primary functions include:
A.
Store of value and standard of deferred payment
B.
Medium of exchange and measure of value (unit of account)
C.
Transfer of value and distribution of national income
D.
Liquidity and credit creation
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ANSWER :
B. Medium of exchange and measure of value (unit of account)
8.
A general rise in the price level implies that the value (purchasing power) of money has:
A.
Increased
B.
Remained unchanged
C.
Decreased
D.
Become infinite
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ANSWER :
C. Decreased
9.
Which one of the following acts as a store of value but does NOT have universal acceptability and easy convertibility like money?
A.
Currency notes
B.
Demand deposits
C.
Gold and landed property
D.
Coins
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ANSWER :
C. Gold and landed property
10.
The number of times a unit of money changes hands during a unit period of time is called the:
A.
Money multiplier
B.
Reserve ratio
C.
Velocity of circulation of money
D.
Liquidity preference
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ANSWER :
C. Velocity of circulation of money
11.
A 'cashless society' is one in which financial transactions are settled mainly through:
A.
Physical bank notes and coins
B.
Barter of commodities
C.
Transfer of digital information (electronic representation of money)
D.
Gold and silver bullion
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ANSWER :
C. Transfer of digital information (electronic representation of money)
12.
Which of the following Indian initiatives is associated with promoting greater financial inclusion and a move towards a cashless economy?
A.
Jan Dhan accounts and Aadhaar enabled payment systems
B.
Cash Reserve Ratio and Statutory Liquidity Ratio
C.
Open Market Operations
D.
Bank Rate policy
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ANSWER :
A. Jan Dhan accounts and Aadhaar enabled payment systems