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IBPS RRB Office Assistant Money, Banking and Credit — practice questions

Explore 48 free Money, Banking and Credit questions in IBPS RRB Office Assistant 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 1–30 of 48.

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 →In which year did India get its central bank, the Reserve Bank of India?Read the answer and worked solution →Which function of money removes the need for a double coincidence of wants in trade?Read the answer and worked solution →The Cash Reserve Ratio is the percentage of a bank's deposits that it must hold asRead the answer and worked solution →The RBI is described as the 'lender of last resort' because itRead the answer and worked solution →Which of these is a function of the Reserve Bank of India?Read the answer and worked solution →Currency issued by the central bank, held by the public or by banks, is known asRead the answer and worked solution →A commercial bank's 'spread' is the difference between the interest itRead the answer and worked solution →Which requirement obliges a bank to hold reserves in liquid form in the short term?Read the answer and worked solution →When the RBI buys government bonds in the open market, the money supplyRead the answer and worked solution →The rate at which the RBI lends money through a repurchase agreement is theRead the answer and worked solution →Under a reverse repurchase agreement, the RBI is effectivelyRead the answer and worked solution →An increase in the bank rate affects the money supply by makingRead the answer and worked solution →Which of these is a quantitative tool of monetary control?Read the answer and worked solution →As interest rates rise, the quantity of money people wish to holdRead the answer and worked solution →A general rise in the price level means the purchasing power of money hasRead the answer and worked solution →Jan Dhan accounts and Aadhaar-enabled payment systems are steps towardsRead the answer and worked solution →With a CRR of 20 per cent and an initial deposit of Rs 100, how much can the bank lend in the first round?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

RBI BasicsNPA & RecoveryBanker-Customer RelationshipNegotiable Instruments ActRBI Act & BR ActMonetary PolicyBasel Norms & CapitalFinancial Institutions