MONEY, FINANCIAL SYSTEMS AND INDIAN ECONOMY - I- MCQ

B.com. Sem. 5
MONEY, FINANCIAL SYSTEMS AND INDIAN ECONOMY - I

1.  Money in traditional sense.
	(A)  Serves as a medium of exchange	(B)  Serves as a store of value
	(C)  Serves as both	(D)  Serves neither
2.  Money includes.
	(A)  Currency and demand deposits	(B)  Government securities
	(C)  Equity shares	(D)  all of the above
3.  Which of the following is the essential characteristic of barter system?
	(A)  Lack of civilization	(B)  Simple and smooth system
	(C)  Inconvenience	(D)  Goods exchanged against goods
4. Invention of money is the outcomes of.
	(A)  People’s intelligence	(B)  Banking system
	(C)  Difficulties of barter	(D)  None of the above
5.  ‘Money is what money does’. Whose remark is this?
	(A) Ely	(B)  Cole
	(C) Robertson	(D)  Walker
6.  “Money is anything that is generally acceptable as a means of exchange and that at the same time act       as a measure and store of value”. Whose are these?
	(A) D.H.Robertson	(B)  G.D.H.Cole
	(C) A.C.Pigou	(D)  Crowther
7.  M1 in India refers to.
	(A) Post office savings deposits	(B)  Total post office savings deposits
	(C) Time deposits with the banks	(D) Currency + demand deposits + other deposits         with RBI
8.  Narrow money refers to
	(A) M1	(B)  M2
	(C) M3	(D) M4
9.  Broad money refers to
	(A) M1	(B)  M2
	(C) M3	(D) M4
10.  Basic distinction between narrow money and broad money is with regard to
	(A) Treatment of post office deposits	(B)  Treatment of post office saving deposits
	(C) Treatment of demand deposits with banks	(D)  Treatment of time deposits with bank
11.  Liquidity approach to the concept of money supply is presented by
	(A) Milton Friedman	(B)   Gurley and show
	(C) Radcliffe committee	(D)  Reserve bank of India
12.  Which of the following measures of money supply represents highest degree of liquidity?
	(A) M1	(B)  M2
	(C) M3	(D) M4
13.  Money market is a market for lending and borrowing of.
	(A)  short-term funds	(B)  long-term funds
	(C)  medium-term funds	(D) None of the above
14.  When share and debentures are sold by the company directly to the public, it is said to be transaction         in.
	(A) Secondary Market	(B)  Primary Market
	(C) Capital Market	(D) All of the above
15.  The rate at which RBI makes very short-term lending to the Commercial banks is known as.
	(A)  Reverse repo rate	(B)  Acceptance rate
	(C) Repo rate	(D)  Bank rate
16.  The rate at which the Commercial banks lend to the RBI is known as.
	(A)  Repo rate	(B)  Call rate
	(C)  Reverse repo rate	(D)  Bank rate
17.  The policy of using repos and reverse repos is now known as.
	(A) Liquidity adjustment facility	(B)  Structural adjustment facility
	(C) Compensating variation policy	(D)  None of the above
18.  Capital market is a market which provides
	(A) Short-term funds	(B)  long-term funds
	(C) very short-term funds	(D)  None of the above
19.  Which of the following statements about commercial bank is incorrect?
	(A) encourage savings among the people	(B)  mobilize savings and make them available for investment
	(C) Commercial banks create credit money	(D)  None of the above
20.  Commercial banks
	(A) Accept deposits	(B)  Advance loans
	(C) Provide agency services	(D)  All these three
21.  ‘Present day banker has three ancestors: merchant, money lender and goldsmith. Who said so?
	(A) R.S. Sayers	(B)  Crowther
	(C) Pigou	(D)  Robertson
22.  Which of the following will be categorized as commercial bank?
	(A) RBI	(B)  LIC
	(C) BOI	(D)  UTI
23.  The term liquidity in the context of commercial bank means
	(A) money supply in the economy	(B)  legal tender money
	(C) capacity to provide cash on hand	(D)  none of the above
24.  Balance sheet of commercial bank is a statement of.
	(A) Its liabilities at the end of a year	(B)  Its assets at the end of a year
	(C) Its assets and liabilities at the end of a year	(D)  Its assets and liabilities at the end of every month
25.  Deposits arising from granting loans are called
	(A) Primary deposits	(B)  Derivative deposits
	(C) Cash deposits	(D) None of the above
26.  Which of the following factors make credit creation by banks possible?
	(A) Primary deposits	(B)  cheque system
	(C) Granting Loans	(D)  all of the above
27.  Which of the following limits credit creation capacity of commercial banks?
	(A) Ratio of cash reserves	(B)  total amount of cash with the banks
	(C) business conditions	(D) all of the above
28.  ‘Banks do not create money out of then air! Who made this remark?
	(A) Hawtrey	(B)  Sayers
	(C) Crowther	(D) Pigou
29.  Which of the following is correct formula for credit creation?
	(A) primary depositscash reserve ratio*100	(B)  cash reserve ratio primary deposits*100
	(C) primary depositsDerivative deposits*100	(D)  Total depositscash reserve ratio*100
30.  If cash reserve ratio is 1/20 and if a bank receives rs.5000 deposits, then the total amount of credit         expansion will be.
	(A) Rs. 4000	(B)  Rs. 40000
	(C)  Rs. 20000	(D)  Rs. 25000
31.  Which of the following works as a central bank of India?
	(A) RBI	(B)  Central bank of India
	(C) SBI	(D)  None of the above
32.  In which year the Reserve bank of India was nationalized?
	(A) 1935	(B)  1947
	(C) 1949	(D)  1958
33.  State bank of India was earlier known as.
	(A) Central bank of India	(B)  Imperial bank of India
	(C) Union bank of India	(D)  None of the above
34.  In which year the state bank of India came into existence?
	(A) 1947	(B)  1955
	(C) 1969	(D)  1975
35.  What is the number of associate bank of state bank of India at present?
	(A) Seven	(B)  Four
	(C) Five	(D)  Three
36.  In which year fourteen major commercial banks were nationalized?
	(A) August 1947	(B)  July 1969
	(C) April 1980	(D)  March 1969
37.  In which year the first act was passed for the setting up of co-operative credit societies in India?
	(A) 1904	(B)   1912
	(C) 1918	(D)   1913
38.  Which committee had recommended the establishment of state co-operative bank in each state and         when?
	(A) Minto-morley committee in 1912	(B)  Maclagan committee in 1914
	(C) Central banking inquiry committee in 1931	(D)  All of the above
39.  Which of the following institutions are included in the three tier structure of co-operative credit?
	(A) Primary co-operative agricultural credit societies	(B)  District co-operative central banks
	(C) state co-operative banks	(D)  all of the above three
40.  Which type of credit is provided to agriculture by the co-operative credit institutions?
	(A) short and medium credit	(B)  long term credit
	(C) very long term credit	(D)  medium term credit
41.  Under which law district central co-operative banks in India were set up?
	(A) Under the act-of 1904	(B)  Under the act-of 1912
	(C) Under the act-of 1914	(D)  Under the act-of 1913
42.  Which is the apex institutional agency in the sphere of agricultural credit in India?
	(A)  District central co-operative banks	(B)  state co-operative banks
	(C) NABARD	(D) None of the above
43.  Which type of credit is provided by development banks?
	(A) Short-term credit	(B)  medium and long term credit
	(C) long term credit	(D)  all of the above
44.  When was the Industrial development bank of India setup?
	(A) July 1950	(B)  July 1964
	(C) April 1969	(D) July 1954
45.  During the tenure of which finance minister the industrial development bank of India was setup?
	(A) Shri C.D. Deshmukh	(B)  Shri Y. B. Chavan
	(C) shri T.T. krishnamachari	(D)  shri Y.K. alagh
46. Which committee had recommended the establishment of export-import bank of India?
	(A) Alexander committee	(B)  Tondon committee
	(C) Indian Institute of foreign trade	(D)  all of the above
47. When did the export-import bank of India start functioning?
	(A) March 1982	(B)  April 1985
	(C) April 1987	(D)  March 1995
48.  In which year the NABARD started its operations?
	(A) April 1975	(B)  July 1982
	(C) April 1987	(D)  July 1995
49. By which of the following agencies credit cards are issued to the customers?
	(A) Banks	(B)  Government
	(C) Private firms	(D)  none of the above
50.  IN which year Kisan credit card scheme was introduced?
	(A) 1998-99	(B)  2003-04
	(C) 2004-05	(D) none of the above

Answers

QUE NO.	ANSWER	QUE. NO.	ANSWER	QUE NO.	ANSWER	QUE NO.	ANSWER	QUE NO.	ANSWER
1.	A	11.	A	21.	A	31.	A	41.	B
2.	A	12.	D	22.	C	32.	C	42.	C
3.	D	13.	A	23.	C	33.	B	43.	B
4.	C	14.	B	24.	C	34.	B	44.	B
5.	C	15.	C	25.	A	35.	C	45.	C
6.	C	16.	C	26.	D	36.	B	46.	D
7.	D	17.	A	27.	C	37.	A	47.	A
8.	A	18.	B	28.	A	38.	B	48.	B
9.	C	19.	D	29.	A	39.	D	49.	A
10.	D	20.	D	30.	C	40.	A	50.	A

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