Money and Banking Quiz by Shubhrata Shrestha | Jul 4, 2025 | 0 comments Money and Banking Quiz 1. Which of the following is not a function of money? A) Medium of exchange B) Unit of account C) Trade barrier D) Store of value None 2. In the equation MV = PY, what does "V" represent? A) Value of goods B) Velocity of money C) Volume of transactions D) Value-added tax None 3. Which account is considered part of narrow money (M1)? A) Fixed deposit B) Demand deposit C) Mutual fund D) Treasury bond None 4. The bank credit multiplier is calculated using: A) 1 / capital ratio B) 1 / reserve ratio C) 1 × interest rate D) GDP ÷ inflation rate None 5. Which policy is not used to reduce inflation? A) Increasing taxes B) Raising interest rates C) Quantitative easing D) Reducing government spending None 6. What is the main goal of a commercial bank in lending activities? A) Maximizing exports B) Liquidity, security, profitability C) Printing currency D) Managing fiscal policy None 7. According to Keynes, the speculative demand for money is held: A) To buy food B) To pay off debts C) To guard against emergencies D) To avoid losses from falling bond prices None 8. Which of the following can increase the money supply in an open economy? A) Selling government securities B) Higher reserve ratio C) Central bank purchasing assets D) Decrease in exports None 9. The loanable funds theory suggests interest rates are determined by: A) Supply and demand for money B) Speculative demand C) Consumer preferences D) Government budget None 10. A higher capital ratio in commercial banks indicates: A) Higher profitability only B) Higher leverage C) Greater financial stability D) Increased inflation risk None Time's up Submit a Comment Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment. Δ
