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Class 12 Commerce Money and Banking — practice questions

Explore 13 free Money and Banking questions in Class 12 Commerce Economics. Open each question or exercise to read its content, reference answers and available explanation.

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Money and Banking questions and exercises with answers

Showing questions 1–13 of 13.

Money overcomes the difficulty of the barter system known as the:Read the answer and worked solution →The function of money by which it is universally accepted in exchange for goods and services is the:Read the answer and worked solution →Using money as a common measuring rod to express the value of all goods is its function as a:Read the answer and worked solution →Money that the law makes obligatory to accept in settlement of debt is called:Read the answer and worked solution →The bank that controls the money supply and acts as the banker to the government in India is the:Read the answer and worked solution →The minimum percentage of deposits that commercial banks must keep with the central bank is the:Read the answer and worked solution →The rate at which the central bank lends short-term funds to commercial banks is the:Read the answer and worked solution →Deposits that can be withdrawn on demand, such as in a current or savings account, are called:Read the answer and worked solution →The currency held by the public plus the reserves of commercial banks together form the:Read the answer and worked solution →Commercial banks are able to create credit primarily on the basis of their:Read the answer and worked solution →In a barter economy, exchange requires that each party wants exactly what the other offers, which is the problem of:Read the answer and worked solution →Acting as the 'lender of the last resort' to commercial banks is a function performed by the:Read the answer and worked solution →The total stock of money in circulation among the public at a point of time is called:Read the answer and worked solution →

Worked practice questions

Money overcomes the difficulty of the barter system known as the:

  1. surplus of goods
  2. lack of double coincidence of wants
  3. absence of banks
  4. scarcity of gold
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Correct answer: B. lack of double coincidence of wants

Barter fails without a double coincidence of wants; money removes this.

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The function of money by which it is universally accepted in exchange for goods and services is the:

  1. standard of deferred payment
  2. medium of exchange
  3. store of value
  4. unit of account
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Correct answer: B. medium of exchange

Medium of exchange: money is accepted for all goods and services.

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Using money as a common measuring rod to express the value of all goods is its function as a:

  1. unit of account
  2. medium of exchange
  3. legal tender
  4. store of value
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Correct answer: A. unit of account

Unit of account: money is the common measure of value.

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