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IBPS Clerk Money, Banking and Credit — practice questions

Explore 17 free Money, Banking and Credit questions in IBPS Clerk Banking Awareness. Open each question or exercise to read its content, reference answers and available explanation.

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Money, Banking and Credit questions and exercises with answers

Showing questions 1–17 of 17.

Modern money is accepted as a medium of exchange primarily because:Read the answer and worked solution →The 'double coincidence of wants' is a problem associated with:Read the answer and worked solution →Three primary functions of money are:Read the answer and worked solution →In India, the authority to issue currency notes (except ₹1) is vested with:Read the answer and worked solution →M3 (broad money) includes M1 plus:Read the answer and worked solution →In rural India, the LARGEST source of credit for the poor traditionally has been:Read the answer and worked solution →Money multiplier in an economy is given by:Read the answer and worked solution →Inflation targeting framework adopted by RBI requires the Monetary Policy Committee to keep CPI inflation within:Read the answer and worked solution →In demonetization (Nov 2016), which currency notes were made invalid?Read the answer and worked solution →The major bank merger of August 2019 reduced number of PSBs from 21 to:Read the answer and worked solution →Public sector banks (PSBs) are banks where:Read the answer and worked solution →NABARD stands for:Read the answer and worked solution →Of these, which is NOT an example of credit?Read the answer and worked solution →Match each money supply measure with its economic constituent components:Read the answer and worked solution →Match each Negotiable Instrument under NI Act 1881 with its legal definition:Read the answer and worked solution →Match each cheque crossing style with its legal limitation:Read the answer and worked solution →Match each credit bureau operating in India with its corporate identity:Read the answer and worked solution →

Worked practice questions

Modern money is accepted as a medium of exchange primarily because:

  1. It is rare
  2. It has intrinsic value
  3. Government authorizes its use (legal tender)
  4. It is beautiful
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Correct answer: C. Government authorizes its use (legal tender)

Modern currency like rupee notes are not made of precious metal and have no use of their own. They are accepted as money because they are authorized by the government of the country (legal tender).

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The 'double coincidence of wants' is a problem associated with:

  1. Modern banking
  2. Currency
  3. Barter system
  4. Online payments
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Correct answer: C. Barter system

In barter, both parties must want what the other has at the same time — double coincidence of wants. Money eliminates this by acting as universal medium of exchange. e.g., shoemaker needing wheat must find farmer wanting shoes.

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Three primary functions of money are:

  1. Just exchange
  2. Hoarding only
  3. Issuing notes
  4. Medium of exchange, unit of account, store of value
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Correct answer: D. Medium of exchange, unit of account, store of value

**Primary functions:** (1) medium of exchange (facilitates transactions) (2) unit of account / measure of value (common yardstick) (3) store of value (savings). **Some add:** standard for deferred payments (loans repaid in future).

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More Banking Awareness topics

NPA & RecoveryBanker-Customer RelationshipNegotiable Instruments ActRBI Act & BR ActRBI BasicsDeposit InsuranceFinancial InstitutionsBasel Norms & Capital