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Karnataka PUC II Commerce Money and Banking — practice questions

Explore 9 free Money and Banking questions in Karnataka PUC II 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 1–9 of 9.

Which is NOT a function of money in a modern economy?Read the answer and worked solution →The central bank of India isRead the answer and worked solution →CRR stands forRead the answer and worked solution →The money multiplier in a single-bank fictional economy with cash reserve ratio CRR isRead the answer and worked solution →In the chapter's M₁ definition, M₁ equalsRead the answer and worked solution →Open Market Operations (OMO) by the RBI refers toRead the answer and worked solution →In the fictional balance sheet of the chapter, if CRR = 20% and initial reserves with the bank are Rs 100, the maximum deposits the system can support areRead the answer and worked solution →Which is a QUALITATIVE tool of monetary policy used by the RBI?Read the answer and worked solution →A bank's balance sheet identity isRead the answer and worked solution →

Worked practice questions

Which is NOT a function of money in a modern economy?

  1. Medium of exchange
  2. Unit of account
  3. Store of value
  4. Source of intrinsic happiness
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Correct answer: D. Source of intrinsic happiness

Money's economic functions are: medium of exchange, unit of account, store of value, and (sometimes) standard of deferred payment.

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The central bank of India is

  1. Reserve Bank of India (RBI), established 1935
  2. Bank of India
  3. ICICI Bank
  4. State Bank of India
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Correct answer: A. Reserve Bank of India (RBI), established 1935

RBI is the central bank — established 1935 — issuing currency and acting as the banker to government and to the banking system.

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CRR stands for

  1. Central Repo Rate
  2. Cumulative Refinance Rate
  3. Credit Reserve Ratio
  4. Cash Reserve Ratio
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Correct answer: D. Cash Reserve Ratio

CRR = Cash Reserve Ratio — the % of deposits that commercial banks must keep as reserves with the RBI.

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