Tag: revenue and revenue curves

Questions Related to revenue and revenue curves

$M _1$ is also known as transaction money because it can be directly used for making transactions. 

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. True

  2. False

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Correct Option: A
Explanation:

$M _1$ consists of  currency notes and coins that are in circulaation with public as well as the demand deposits with commercial banks. These can be used by the public directly for any transactions. Hence, $M _1$ is also known as 'Transaction Money'.

Demand deposits include __________________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. Saving account deposits and fixed deposits

  2. Saving account deposits and current account deposits

  3. Current account deposits and fixed deposits

  4. All types of deposits

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Correct Option: B
Explanation:

Demand deposit refers to the deposit wherein the amount which you have deposited with the bank can be withdrawn by you any time. It includes saving account deposit and currency account deposit in which currency account is mainly meant for businessmen, and saving account is meant for general public.

Size of money multiplier is given by the inverse of LRR. 

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. True

  2. False

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Correct Option: A
Explanation:

Money multiplier is inversely related to LRR as Money Multiplier $= \dfrac{1}{LRR}$.

M1 includes net demand deposits and not gross demand deposits, as net demand deposits do not include inter-banking claims.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. True

  2. False

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Correct Option: A
Explanation:

True.

Money supply refers to the total stock of money of all types ( currency as well as demand deposits) held by the people of a country at a given point of time. 

Money supply is measured in several ways among which M1 is a type of measurement that measures the money as a medium of exchange function. 

M1= C+ DD+ OD 

where, 

C: It refers to currency held by public in terms of coins and paper notes.

DD: It refers demand deposits of the people with the commercial bank.

OD: These includes other deposits with public financial institution, foreign central banks and international financial institution. 

Money Supply in India can be increased if 

    1. RBI puts more paper money for circulation
    2. The commercial banks expand their credit operations
    3. The central Govt. gives more grants to the states
    4. The Govt. of

    economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

    1. 1, 2 and 3

    2. 2, 3 and 4

    3. 1, 3 and 4

    4. 1, 2 and 4

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    Correct Option: D

    Markets which deals with high liquid and short term debt securities are classified as _____________.

    economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

    1. capital markets

    2. money markets

    3. liquid markets

    4. short-term markets

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    Correct Option: B

    Many banks have adopted/launched a "Core Banking Solution" (CBS). Which of the following is a Core Banking Solution?

    economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

    1. A marketing strategy adopted by the banks

    2. A new type of ATM useful for rural population

    3. A delivery channel for quick and fast delivery

    4. A new product launched to help senior citizens only as they are not able to visit branches/ATMs frequently

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    Correct Option: C

    A money deposited in a bank that cannot be withdrawn for a preset fixed period of time is known as a ____________________.

    economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

    1. term deposit

    2. checking account

    3. savings bank deposit

    4. no frills account

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    Correct Option: A

    Which of these is/are not a function of money?

    economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

    1. Hedges against inflation.

    2. Unit of measurement.

    3. Medium of exchanges.

    4. Measurement of value.

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    Correct Option: A

    Which of these statements is true?

    economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

    1. Precautionary demand for money is due to uncertainty of income and expenditure

    2. Uncertainty of future leads to precautionary demand for money

    3. Precautionary demand for money is related to income level

    4. All the three

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    Correct Option: D
    Explanation:

    Precautionary motive of money refers to the demand for money to store it for future uncertainties. In other words, if money is demanded so that it can be kept for bad days then the demand of such money is known as precautionary money. In such cases, money functions as the store of value. Precautionary money balance in needed in a company so that it can be used if there is any uncertainty of receipt in the income and expenditure statement which means the company can make use of this money if the expenditure exceeds the income in a particular year.