Tag: commercial studies

Quizzes (186) Questions (1136)

Questions Related to commercial studies

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Base Rate is the rate below which no Bank can allow their lending to anyone. Who sets up this 'Base Rate' for Banks?

  1. Individual Bank Board

  2. Ministry of Commerce

  3. Ministry of Finance

  4. Reserve Bank of India
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Reserve Bank of India (RBI) mandates the Base Rate system to ensure transparency in lending rates and to prevent banks from lending below a certain threshold.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

State with reasons the following statement is True or False.
Money is the basis of credit.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

True. 

Money serves as the standard of deferred payment. Deferred payments refer to payments made on loans, salaries, pensions, insurance premium, interests, and rents. The necessary condition for deferred or credit payment is that the amount of repaid money should be the same as it was at the time of purchase of the good. Since all the goods and services can be expressed in terms of money, it makes the future payments easy and functional which makes money the basis for credit  transactions in the economy. 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

State whether the following statement is True or False.
Credit Money can be refused.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Money serves as the standard of deferred payment. Deferred payments refer to payments made on loans, salaries, pensions, insurance premium, interests, and rents. The necessary condition for deferred or credit payment is that the amount of repaid money should be the same as it was at the time of purchase of the good. Since all the goods and services can be expressed in terms of money, it makes the future payments easy and functional which makes money the basis for generating credit in the economy. But sometimes credit money can be refused owing to the natural appreciation or depreciation of commodities with time due to which their monetary value at the time of deal does not match with their monetary value at the time of payment. 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

The part of income which is not spent on consumption is called _______. 

  1. expenditure

  2. saving

  3. investment

  4. public debt
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Savings refers to the part of the income which is not spent on the consumption of goods and services in the economy. It is that portion of the income which is kept aside for an instant and then re-invested into some asset in order to generate more income through these savings. 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

_________ is also called credit market.

  1. Financial market

  2. Commodity market

  3. Stock market

  4. Money market
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Money market refers to the market where money is traded just as a commodity between two parties. It is a part of financial market where money is used as a financial assets for short term borrowing, lending, buying and selling which matures in less than a year. Since money is given and taken on credits in this market, therefore it is also known as credit market. 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Which of the following is called credit market?

  1. Money market

  2. Super market

  3. Bombay Stock Exchange

  4. RBI
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Money market refers to the market where money is traded just as a commodity between two parties. It is a part of financial market where money is used as a financial assets for short term borrowing, lending, buying and selling which matures in less than a year. Since money is given and taken on credits in this market, therefore it is also known as credit market. 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Saving deposit does not form part of _________________.

  1. Demand deposit

  2. Time deposit

  3. Board money

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Time deposits refers to the deposits with the commercial banks which can be withdrawn from the account holder's account after the expiry of a specified period of time. Savings do not form a part of time deposit as it is a part of demand deposit because any amount up to the limit of the credit balance can be withdrawn as per the wish of the account holder. Therefore, savings deposit does not form a part of time deposit. 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

_______ of a given sum of money due at the end of a certain period of time is that sum which if invested now at the given rate of interest accumulates to the given sum at the end of the period.

  1. Annuity

  2. Interest

  3. The present value

  4. None of above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The present value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

The person who provides loan is known as a _______________.

  1. money lender

  2. borrower

  3. payer

  4. drawee
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The person who provides loan is known as a money lender. In other words, the person who lends money to someone or any institution for the purpose of personal expenditure like consumption of goods and services or investment is known as a money lender. 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

If the periodic payments are made at the end of each period; the annuity is called _________________.

  1. annuity due

  2. an immediate annuity

  3. ordinary annuity

  4. (B) or (C)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

An annuity where payments are made at the end of each period is called an ordinary annuity or an immediate annuity.