MONEY AND CREDIT (IMPORTANT NTSE MCQ QUESTION WITH SOLUTION

 

MONEY AND CREDIT

Q-1. Demand and supply of the money can be controlled the-

a) Central Bank

b) States Bank

c) R.B.I.

d) None of these

Ans. (a) Central Bank

Q-2. Formal sources of credit does not Include-

a) Bank

b) Cooperative

c) Employers 

d) Garmin Bank

Ans. (c) Employers

Q-3. ……….. Cost of borrowing increase the debt-burden-

a) Bank 

b) Members 

c) Non-government organization 

d) None of these

Ans. (b) Members

Q-4. Name the organization which supervises the functioning of the formal sources of credit-

a) R.B.I.

b) Central Bank

c) S.B.I.

d) All the above

Ans. (a) All the above

Q-5. In which year Reserve Bank was set up?

a) 1930

b) 1935 

c) 1940

d) 1945

Ans. (b) 1935

Q-6. Which Bank was merged with Punjab National Bank in 1993?

a) New Bank of India

b) Bank of Maharashtra

c) Kashi Nath Bank

d) Indus Bank

Ans. (a) New Bank of India

Q-7. Ina SHG (Self Help Group) important decisions in regard to loan and savings are taken by: 

a) Govt. organization

b) Bank

c) Non-Government organization

d) Members

Ans. (d) Members

Q-8. What is the most essential features of the barter system?

a) Double coincidence of wants

b) Money

c) Goods

d) All above

Ans. (a) Double coincidence of wants

Q-9. Which of the following is an example of working capital

a) Tool 

b) Machine

c) Building 

d) Raw material

Ans. (d) Raw material

Q-10. The purpose of devaluation of India rupee is:

a) To reduce imports and to increase exports

b) To increase imports and to reduce exports

c) To reduce differences between value of goods and value of services imported

d) To maintain favourable balance of payments.

Ans. (d) to maintain favourable balance of payments.

 Q-11. ........ Is authorised to issue currency in India

a) Commercial Bank

b) Reserve Bank of India

c) NABARD

d) Finance Companies

Ans. (b) Reserve Bank of India

Q-12. Terms of credit do not include

a) interest rate

b) collateral

c) documentation

d) lender's land

Ans. (d) lender's land

Q-13. Formal sources of credit do not include

a) banks

b) cooperatives

c) employers

d) none of these

Ans. (c) employers

Q-14. Informal sector loans include

a) NABARD

b) State Bank of India ne central

c) Moneylenders

d) Both (b) and (c)

Ans. (c) Moneylenders

Q-15. Banks and cooperatives need to lend more to borrowers because 

a) High cost of borrowing from informal sources

b) Borrowers wish to set up enterprises demand

c) Borrowers need more money but cannot ask

d) None of these

Ans. (a) High cost of borrowing from informal sources

Q-16. Poor households in urban areas take loans from ………….. Sources.

a) Formal

b) Informal

c) Both (a) and (b)

d) None of these

Ans. (b) Informal

Q-17. What prevents the poor from getting bank loans?

a) Complexity of procedure

b) Absence of collateral

c) High rates of interest

d) None of these

Ans. (b) Absence of collateral

Q-18. In a SHG, most of the decisions regarding savings and loan activities are taken by

a) Bank

b) Group members

c) Non-government organisation

d) Government

Ans. (b) Group members

Q-19. What is the name of the success story that met the credit needs of the poor, at reasonable rates, in Bangladesh?

a) Garmin Bank

b) Reserve Bank

c) Cooperative Bank

d) None of these

Ans. (a) Garmin Bank

Q-20. People deposit money in the bank because

A) Get interest

B) Money remains secured

C) Money is used in country's development

D) Value of money increases

a) A and B

b) B and C 

c) A, B and C

d) A, B, C and D

Ans. (d) A, B, C and D

Q-21. Example of barter exchange is

a) Purchasing wheat with money

b) Purchasing fruit with money

c) Purchasing milk with money

d) Purchasing sugar with wheat

Ans. (d) Purchasing sugar with wheat

Q-22. A payment made by account payee cheque means:

a) Anyone can present the cheque and get payment from the bank

b) Only drawer can deposit the cheque and get credit in his bank account

c) The cheque can be given by the drawer to third party who can get credit in his account.

d) None of these

Ans. (b) only drawer can deposit the cheque and get credit in his bank account

Q-23. There is restriction of withdrawing money in a:

a) Savings account

b) Current account  

c) Fixed deposit account

d) None of these

Ans. (c) Fixed deposit account

Q-24. Interest payment will be higher on a house loan on account of:

a) high tenure of loan

b) high rate of interest 

c) high risk of borrower profile 

d) all of these

Ans. (d) all of these

Q-25. More money chasing less goods and services means:

a) Inflation

b) Deflation

c) Stagflation

d) None of these

Ans. (a) Inflation

Q-26.  Formal sources of credit comes from:

a) Landlord 

b) Relatives or friends

c) Commercial banks 

d) Businessmen

Ans. (c) Commercial banks 

Q-27. Which system has been replaced by Money as a medium of exchange?

a) Exchange System 

b) Commodity System 

c) Barter System 

d) Double coincidence of wants

Ans. (c) Barter System

Q-28. Which of the following does not come under modern forms of money?

a) Currency

b) Cheque Payments

c) Demand deposits

d) Loan Payments

Ans. (d) Loan Payments

Q-29. Informal sources of credit does not include:

a) Traders

b) Relatives and friends 

c) Employers  

d) Cooperatives 

Ans. (a) Traders

Q-30. SHGs stands for:

a) Self-House Groups 

b) Self Help Groups

c) Society Help Groups

d) Social Help Groups 

Ans. (b) Self Help Groups

Q-31. A formal source of credit does not include:

a) Banks

b) Co-operatives 

c) Employers 

d) LIC

Ans. (c) Employers

Q-32. Security (pledge, mortgage) against loan

a) Collateral 

b) Token Coins

c) Promissory Note 

d) Currency

Ans. (c) Promissory Note 

Q-33. In Sonpur village, everyone is not able to get credit from a bank because

a) they don't want to take a bank loan  

b) banks demand collateral which everyone cannot provide

c) interest rate on bank loans are high 

d) none of the above

Ans. (b) banks demand collateral which everyone cannot provide

Q-34. Since money acts as an intermediate in the exchange process, it is called

a) Value for money  

b) Exchange value

c) Medium  of exchange 

d) None  of these

Ans. (c) Medium of exchange

Q-35. Modern forms of money include

a) Paper notes 

b) Gold coins

c) Silver coins

d) Copper coins

Ans. (c) Silver coins

Q-36. Who issues the currency notes on behalf of the central government in India?

a) NABARD

b) Reserve Bank of India (RBI)

c) World Bank

d) State Bank of India (SBI)

Ans. (b) Reserve Bank of India (RBI)

Q-37. The deposits in bank accounts withdrawn on demand are called 

a) Fixed deposits 

b) Recurring deposits

c) Demand deposits 

d) None of these

Ans. (c) Demand deposits 

Q-38. Banks in India these days hold about ……….. Per cent of their deposits as cash.

a) 50

b) 20

c) 15

d) 10

Ans. (c) 15

Q-39. Major portion of the deposits is used by banks for

a) Setting up new branches

b) Paying taxes 

c) Paying interest

d) Extending loans

Ans. (d) Extending loans

Q-40. What is the main source of income for banks?

a) Interest on loans  

b) Interest on deposits 

c) Difference between the interests charged on Borrowers and depositors

d) None of these

Ans. (c) Difference between the interests charged on Borrowers and depositors

Q-41. In rural areas, farmers take credit for?

a) Family

b) Health 

c) Crop production

d) Education

Ans. (c) Crop production

Q-42. A 'debt trap' means

a) Inability to repay credit amount 

b) Ability to pay credit amount

c) Overspending till no money is left

d) None of these

Ans. (a) Inability to repay credit amount 

Q-43. What is the 'collateral demand that lenders make against loans?

a) Vehicle of the borrower

b) Building of the borrower

c) Both (a) and (b) 

d) None of these

Ans. (c) Both (a) and (b)

Q-44. What is the most essential features of the barter system? 

a) Double coincidence of wants

b) Money

c) Goods 

d) All above

Ans. (a) Double coincidence of wants

Q-45. Name the organisation which issue currency notes in India on behalf of the central government?

a) Central Bank

b) S.B.B.J.

c) P.N.B.

d) R.B.I

Ans. (d) R.B.I

Q-46. The system of exchanging goods is known as -

a) Money 

b) Barter system

c) Credit

d) None of these

Ans. (b) Barter system

Q-47. Money includes –

a) Paper notes

b) Coins

c) Demand Deposits

d) All the above

Ans. (d) All the above

Q-48. Money is authorised by the -

a) State govt.

b) Govt. of the country

c) Bank

d) Landlords

Ans. (b) Govt. of the country

Q-49. IMF stands for what?

a) International Military Force

b) International Monetary Fund

c) Indian Monetary Fund

d) Indian Monetary force

Ans. (b) International Monetary Fund

Q-50. Bank use the major portion of the deposits to:

a) Keep as reserve so that people may withdraw

b) Meet their routine expenses and salary of staff

c) Meet renovation and expansion of bank

d) Extend loans 

Ans. (d) Extend loans 

Q-51. Formal sources of loans include loans from

a) Banks

b) Money lenders

c) Co-operatives societies

d) Traders

Ans. (d) Traders

Q-52. Who is the Governor of Reserve Bank of India at Present? 

a) D. Subbarao

b) Raghu Ram Rajan

c) P. Chidambaram

d) Narayan Reddy 

Ans. (b) Raghu Ram Rajan

Q-53. Excess supply of Money will not Create inflationary pressure if, in the country,

a) demand for different good and services increase

b) productivity increases

c) rate of tax decreases

d) rate of interest decreases

Ans. (a) demand for different good and services increase

Q-54. The rate at which Central bank gives credit to commercial bank is called? 

a) Bank Rate

b) Interest Rate

c) Cash Reserve Ratio

d) Statutory Liquidity Ratio

Ans. (a) Bank Rate