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Money Chapter Notes

The document contains a quiz with multiple choice and true/false questions about money and banking concepts. It also includes fill-in-the-blank and matching questions. Finally, there are short answer and essay questions about topics like the evolution of money, functions of money, types of bank deposits, and the effects of black money. The document appears to be a quiz or exam assessing understanding of foundational concepts in personal finance and banking.

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Chandan Tendu
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© © All Rights Reserved
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Download as DOCX, PDF, TXT or read online on Scribd
125 views

Money Chapter Notes

The document contains a quiz with multiple choice and true/false questions about money and banking concepts. It also includes fill-in-the-blank and matching questions. Finally, there are short answer and essay questions about topics like the evolution of money, functions of money, types of bank deposits, and the effects of black money. The document appears to be a quiz or exam assessing understanding of foundational concepts in personal finance and banking.

Uploaded by

Chandan Tendu
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 7

i Choose the correct answer

Question 1. Which metals were used for metallic money?


(a) Gold (b) Silver (c) Bronze (d) All the above
Answer:
(d) All the above

Question 2. Who introduced the paper money?


(a) British (b) Turkish (c) The Mugual Empire (d) Mauryas
Answer:
(a) British

Question 3. The value of money is


(a) Internal value of money (b) External value of money
(c) Both a & b (d) None of these
Answer:
(c) Both a & b

Question 4. Which is the Bank Money?


(a) Cheque (b) Draft (c) Credit and Debit cards (d) All the above
Answer:
(a) Cheque

Question 5. Pick out the incorrect one:


Investment can be made in different vehicle.
(a) Stock (b) Bonds (c) Mutual fund (d) Pay tax
Answer:
(d) Pay tax

Question 6. Who is responsible for the collection and publication of


monetary and financial information?
(a) Finance commission (b) Finance Ministry
(c) Reserve Bank of India (d) Auditor and Comptroller General of India
Answer:
(c) Reserve Bank of India
ii.Fill in the Blanks
1. Online Banking is also known as ……………
2. ……………. is what money does.
3. The term of bank is derived from ……………. word.
4. Value of money is meant …………….. of money.
5. The Indian banking regulation act of ……………..
Answer:

1. Net Banking
2. Money
3. German
4. The purchasing power
5. 1949

III. Match the following

Answer:

1. iv
2. v
3. ii
4. iii
5. i

iv Answer the following questions


Question 1. What is the Barter System?
A barter system is an old method of exchange. Barter system is exchanging
goods for goods without the use of money in the primitive stage.
Question 2. What are the recent forms of money?
Answer: Plastic Money and E – Money

Question 3. Write a Short note on E – Banking and E – Money.


Answer:

1. E – Money:
Electronic Money is money which exists in banking computer systems and
is available for transactions through electronic system.

2. E – Banking:
Electronic banking, also known as National Electronic Funds Transfer
(NEFT), is simply the use of electronic means to transfer funds directly from
one account to another rather than by cheque or cash.

Question 4. What are the essential of Money in your life?


Answer:
Money is used as the source to fulfil basics needs as well as comforts in life.
It gets people accommodation, clothes, food and other things which add to
luxury in life.
It is an important source to live a healthy life too.

Question 5. What is Savings and Investment?


Answer:

1. Savings represents that part of the person’s income which is


not used for consumption
2. Investment refers to the process of investing funds in capital
asset, with a view to generate returns

Question 6. What is meant by Black Money?


Answer: Black Money is money earned through any illegal activity
controlled by country regulations.
Question 7. What are the uses of savings?

 You will be financially independent sooner.


 You would not have to worry any unforeseen expenses.
 In future, you will have financial backup in place if you lose your
job.
 You will be prepared if your circumstances change.
 You will be more comfortable in retirement.
 Save today for better tomorrow

v. Write Brief answer


Question 1. What are the disadvantages of barter system?
Answer:

1. Lack of double coincidence of wants,


2. Common measure of value
3. Indivisibility of commodities
4. Difficulties of storing wealth

Question 2. Write about the evolution of Money.


Answer:
Money has evolved through different stages according to the time, place
and circumstances.

1. Commodity Money:
In the earliest period of human civilization, any commodity that was
generally demanded and chosen by common consent was used as money.

2. Metallic Money:
With progress of human civilization, commodity money changed into
metallic money. Metals like gold, silver, copper, etc. were used as they
could be easily handled.

3. Paper Money:
(a) It was found inconvenient as well as dangerous to carry gold and silver
coins from place to place. So, invention of paper money marked a very
important stage in the development of money.
4. Credit Money or Bank Money:
(a) Emergence of credit money took place almost side by side with that of
paper money. Example Cheque.

5. Near Money:
The final stage in the evolution of money has been the use of bills of
exchange, treasury bills, bonds, debentures, savings certificate etc.

Question 3. What are the functions of Money? and explain it.


Answer:
Functions of money are classified into Primary or Main function, Secondary
function and Contingent function.

Primary or main functions:

1. Medium of exchange or means of payment – Money is used to buy the


goods and services.

2. Measure of value – All the values are expressed in terms of money it is


easier to determine the rate of exchange between various type of goods
and services.

Secondary functions:
The three important of secondary functions are
1. Standard of deferred payment – Money helps the future payments too. A
borrower borrowing today places himself under an obligation to pay a
specified sum of money on some specified future date.

2. Store of value or store of purchasing power – Savings were discouraged


under barter system as some commodities are perishable. The introduction
of money has helped to save it for future as it is not perishable.

3. Transfer of value or transfer of purchasing power – Money makes the


exchange of goods to distant places as well as abroad possible. It was
therefore felt necessary to transfer purchasing power from one place to
another.
Question 4. Explain the types of bank Deposits.

Answer:
1. Student Savings Account:
There are savings accounts some banks offer specifically for young people
enrolled in high school or college, and they main feature more flexible
terms such as lower minimum balance requirements.

2. Savings Deposits:
Savings deposits are opened by customers to save the part of their current
income. The customers can withdraw their money from their accounts when
they require it. The bank also gives a small amount of interest to the money
in the saving deposits.

3. Current Account Deposit:


Current accounts are generally opened by business firms, traders and public
authorities. The current accounts help in frequent banking transactions as
they are repayable on demand.

4. Fixed Deposits:
Fixed deposits accounts are meant for investors who want their principle to
be safe and yield them fixed yields. The fixed deposits are also called as
Term deposit as, normally, they are fixed for specified period.

Question 5. What are the difference between savings and investment?


Answer:
Question 6. What are the effects of black money on economy?
Answer:|
Effects of Black Money on economy

1. Dual economy
2. Tax evasion, thereby loss of revenue to government.
3. Undermining equity
4. Widening gap between the rich and poor
5. Lavish consumption spending
6. Distortion of production pattern
7. Distribution of scarce resource
8. Effects on production.

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