AMITY INTERNATIONAL SCHOOL, MAYUR VIHAR

SUBJECT: ECONOMICS
CLASS: XII
CHAPTER: MONEY
DATE: 4/07/24

CUET AND CBSE MCQ:

1. What items are not included in M1 measure of supply?
(a) Currency and coins with public (b) Inter-bank deposits
(c) Other deposits with RBI (d) Net demand deposits with banks

2. High powered money consists of:

(a) Currency and coins held by the public
(b) Currency, cash reserves with banks and demand deposits
(c) Currency held by public and cash reserves with banks
(d) Currency and demand deposits

3. Money supply refers to:

(a) Total volume of money held by public at a particular point of time
(b) Total volume of money held by public over a period of time
(c) Total volume of money held by the government
(d) Both (a) and (b)

4. Money supply is a __________ concept.

(a) Stock (b) Flow
(c) Both (a) and (b) (d) Neither (a) nor (b)

5. Who regulates money supply? {CBSE, All India Comptt. 2015}

(a) Government of India (b) Reserve Bank of India
(c) Commercial Banks (d) Planning Commission

6. Money supply includes __________. {CBSE, All India Comptt. 2016}

(a) All Deposits in Banks (b) Only Demand Deposits in Banks
(c) Only Time Deposits in Banks (d) Currency with the Banks

7. Supply of money refers to quantity of money: {CBSE, Sample Paper 2017}

(a) As on 31st March (b) During any specified period of time f
(c) As on any point of time (d) During a fiscal year
OR
The total stock of money in circulation among the public __________ is called as 'money supply'. {CBSE, 2021-22 (Term 1) 058/3/4}
(a) During a period of time (b) During a calendar year
(c) At a particular point of time (d) During a fiscal year

8. __________ is the main source of money supply in an economy. {CBSE, Delhi Comptt. 2018}
(a) Central Bank (b) Commercial Banks
(c) Both (a) and (b) (d) Government

9. __________ are termed as Legal Tender Money.

(a) Demand deposits (b) Time Deposits
(c) Inter-bank deposits (d) Currency Notes

10. Demand deposits with Commercial Banks are a part of:

(a) Money Supply (b) High Powered Money
(c) Both (a) and (b) (d) Neither (a) nor (b)

AISMV/SR-24/ECO/WS
11. Currency means:
(a) Currency Notes (b) Coins
(c) Both (a) and (b) (d) None of these

12. Which of the following statement is false?

(a) Money supply is a stock concept
(b) High powered money includes demand deposits of commercial banks, besides currency with the public
(c) M, includes gross demand deposits instead of net demand deposits
(d) None of these

13. In India, paper notes are:

(a) Limited Legal Tender (b) Unlimited Legal Tender
(c) Both (a) and (b) (d) None of these

14. Which of the following statements is correct about Money Supply?

(a) It includes cash reserve of banks
(b) It is a flow variable
(c) It refers to stock of money held by public at a point of time
(d) It refers to stock of money held by public over a period of time

15. In India, money creating sector are:

(a) Banking System (b) Government of the country
(c) Both (a) and (b) (d) None of these

16. Money Supply does not include money held by:

(a) Government (b) Commercial Banks
(c) Reserve Bank of India (d) All of these

FUNCTIONS OF MONEY (AGAIN ADDITION IN SYLLABUS)

1. Read the following dialogue between two people: {CBSE, Sample Paper 2015}
Sita : I want 1 kg of potatoes
Rani : What will you give in exchange?
Sita : I can give you 2 litres of milk in return for the potatoes.
Rani : I don't need milk. I want a pair of shoe
Which of the following problem is being faced by Sita and Rani in their exchange process?
(a) Lack ofdouble coincidence of wants (b) Absence of common units of value
(c) Lack of store of value (d) Lack of standard of deferred payment

2. Which of the following is not a problem of barter system of exchange? {CBSE Delhi Comptt. 2016}
(a) Store of Value (b) Double Coincidence of Wants
(c) Unit of Account (d) Unemployment

3. If Harish has a Mobile and he wants a Tablet. Shivam has a Laptop and he wants a Mobile in exchange of laptop, than what problem
Harish and Shivam are facing:
(a) Lack of Measure of Value (b) Lack of Double Coincidence of Wants
(c) Lack of Store of Value (d) None of these

4. 'If you have 2 meters cloth and you want wheat against it, then how much wheat you should get. 'Which drawback of Barter
Exchange is highlighted?
(a) Lack of Medium of Exchange (b) Lack of Store of Value
(c) Lack of Measure of Value (d) None of these

5. 'A can exchange goods with B only when A has what B wants and B has what A wants. 'This is referred to as __________under
Barter System.
(a) Standard of Deferred Payments (b) Common Measure of Value
(c) Double Coincidence of Wants (d) None of these

AISMV/SR-24/ECO/WS
6. Which one of these is a limitation of the barter exchange?
(a) Lack of double coincidence of wants (b) Lack of store of value
(c) Lack of common measure of value (d) All of these

7. Which function of money is highlighted in the given statement: 'It has separated the acts of sale and purchase'?
OR
With the help of this function of money, a person can buy/sell anything through money (without selling/buying in return). Which
function of money is highlighted in the given statement?
(a) Standard of Deferred Payments (b) Store of Value
(c) Measure of value (d) Medium of Exchange

8. Which function of money is also known by the name of "Unit of Account"?

OR
Which function of money is highlighted when we say: 'lt helps to measure the value of goods and services'?
(a) Medium of exchange (b) Standard of deferred payments
(c) Measure of value (d) Store of value

9. Identify the function of money which has led to capital formation and economic development of the economy.
OR
Which function of money has removed the difficulty of contractual and future payments?
(a) Medium of exchange (b) Measure of value
(c) Store of value (d) Standard of deferred payments

10. Which function of money is highlighted in the given statement: 'It works as common denomination'?
(a) Store of value (b) Unit of value
(c) Medium of exchange (d) None of these

11. Which function of money has overcome the problem of lack of double coincidence of wants?
(a) Measure of value (b) Medium of exchange
(c) Standard of deferred payments (d) Store of value

12. Sushma tried to discharge her debt of ₹ 25,000 by giving one rupee coins which were not accepted because coins are:
(a) Part of Money Supply (b) Limited Legal Tender
(c) Unlimited Legal Tender (d) None of these

13. Which function of money has simplified the borrowing and lending operations?
(a) Medium of exchange (b) Store of value
(c) Standard of deferred payments (d) All of these

14. 'People save money in various forms to meet contingencies, unpredictable emergencies and to pay future debts. 'Which function
of money is being highlighted in the given statement?
(a) Standard of Deferred Payments (b) Store of Value
(c) Measure of value (d) Medium of Exchange
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1. Assertion (A): Net Demand Deposits (and not Gross Demand Deposits) of Commercial Banks are included in the money supply.
Reason (R): Inter-bank deposits are the deposits held by banks on behalf of other banks and do not belong to the public.
2. Assertion (A): Secondary Functions of Money are also known as Derivative Functions.
Reason (R): Secondary Functions are derived from primary functions of money.
3. Assertion (A): Currency held with the government and banks is not included in the Money Supply.
Reason (R): Currency can be legally used to make payment of debts or other obligations.
4. Assertion (A): Demand Deposits with Commercial Banks are not a part of Money Supply.
Reason (R): Demand Deposits are treated as equal to currency held as they are readily accepted as means of payment.
5. Assertion (A): Notes and Coins are the only source of money supply in the economy.
Reason (R): Demand deposits with commercial bank is also a component of money supply.

AISMV/SR-24/ECO/WS