Tag: functions of money

Questions Related to functions of money

The one rupee note and coins are issued by _____________.

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. RBI (Central Bank)

  2. Commercial Bank

  3. Ministry of Finance

  4. Central Government

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Correct Option: C
Explanation:

Reserve bank of India has the sole right to issue currency notes of various denominations except one rupee notes under Section 22 of Reserve bank of India Act. The one rupee note and coins are issued by ministry of finance and it bears the signature of Finance Secretary.

Other name for legal reserve requirement is ________________.

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. Cash reserve ratio

  2. Statutory liquidity ratio

  3. Variable reserve ratio

  4. Bank rate

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Correct Option: C
Explanation:

The variable reserve ration is a new method of credit control used by central banks in recent times. The variable reserve ratio device springs from the fact that central bank, as a Bankers Bank, must hold a part of the cash reserves of commercial banks.

What is the value of money multiplier when initial deposits are $Rs. 500$ crores and LRR is $10%$?

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. $0.1$

  2. $0.2$

  3. $10$

  4. $20$

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Correct Option: A
Explanation:

$MONEY\space MULTIPLIER = \dfrac{1}{LRR}$

$MONEY\space MULTIPLIER = \dfrac{1}{10} = 0.1$
                                                     

All of the following is function of money except __________.

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. to provide durability

  2. to be portable

  3. to be divisible

  4. None of the above

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Correct Option: A

Liquidity of asset is dependent on __________.

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. the term of amatively of the asset

  2. existence of organized secondary Markets

  3. both a & b

  4. none of the above

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Correct Option: C

Four Functions money as per functional approach are

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. Medince

  2. Measure

  3. Saving

  4. Both a & b

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Correct Option: D

Value of money is dependent on holding power of money .It is

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. Transaction approach

  2. Cash balance approach

  3. Debit balance approach

  4. Asset approach

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Correct Option: B

The main functions performed by money are called ___________.

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. contingent functions

  2. secondary functions

  3. primary or original function

  4. important functions

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Correct Option: C

Primary functions of money ________.

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. medium of exchange

  2. measure of value

  3. standard of deferred payment

  4. both (A) and (B)

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Correct Option: D

Prof. Kinley has mentioned _____ contingent functions of money.

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. two

  2. three

  3. four

  4. five

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Correct Option: C