14 Multiple Choice Questions (MCQs) With Answers on Money, Banking and Public Finance

(a) “Money is what money does” – who said?

(i) Crowther

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(ii) Robertson


(iii) Walker

(iv) Marshall

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(b) Direct exchange of goods against goods is called:


(i) Charter

(ii) Money

(iii) Barter

(iv) None of these


(c) What possess general acceptability?

(i) Bank draft

(ii) Money

(iii) Bill of exchange

(iv) None of these

(d) Which type of deposits gives highest rate of interest?

(i) Current deposit

(ii) Fixed deposit

(iii) Recurring deposit

(iv) None of these

(e) Which bank deals with short-term credit?

(i) Agricultural bank

(ii) Commercial bank

(iii) Industrial bank

(iv) None of these

(f) Which of the following is not the function of the commercial bank?

(i) Issue of paper notes.

(ii) Acceptance of deposits

(iii) Advancing loans

(iv) Credit control

(g) Which of the following is not near money?

(i) Paper notes

(ii) Treasury bill

(iii) Bond

(iv) Bill of exchange

(h) Which bank is called lender of last resort?

(i) Commercial bank

(ii) Agricultural bank

(iii) Industrial bank

(iv) Central bank

(i) In which year the Reserve Bank of the India was established?

(i) 1945

(ii) 1947

(iii) 1935

(iv) 1953

(j) Which bank enjoys monopoly power of Note issue?


(ii) Commercial Bank

(iii) Central Bank

(iv) None of these

(k) For which function, money is accepted as unit of account?

(i) Measure of value,

(ii) Medium of exchange

(iii) Standard of deferred payment

(iv) Store of value

(l) Which is considered as the mother of all Central Banks?

(i) Bank of England

(ii) Risks Bank of Sweden

(iii) Federal Reserve Bank

(iv) Reserve Bank of India

(m) Which of the following is an example of direct tax?

(i) Sales tax

(ii) Commodity tax

(iii) Income tax

(iv) None of these

(n) Who deals with income and expenditure of public authorities?

(i) Public finance

(ii) Private finance

(iii) Local Govt.

(iv) None of these


(a) Walker, (b) Barter, (c) Money, (d) Fixed deposit, (e) Commercial bank, (f) issue of paper notes, (g) paper notes, (h) Central bank, (i) 1935, (j) Central bank, (k) Measure of value, (l) Bank of England, (m) Income tax, (n) Public finance.


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