Tag: economics

Questions Related to economics

The financial market for short term funds is known as ___________.

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

  1. capital market

  2. money market

  3. bullion market

  4. share market

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Correct Option: B

The portion of income not spent on ________ is saving.

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

  1. consumption

  2. production

  3. distribution

  4. none of the above

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Correct Option: A
Explanation:

Saving is that part of income which is not spent on consumption. It is also called deferred consumption.

Which one of the following is the most important determinant of speculative demand for money?

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

  1. Income

  2. Interest rate

  3. Profits

  4. Prices

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Correct Option: B
Explanation:

The demand for money for speculative purposes in order to undertake investments for future returns is based upon the rate of interest prevailing in the economy. It is algebraically expressed in the form of a function as:  $S _{m}=f(r)$.

Who proposed a model to apply economic order quantity concept of inventory management to determine the optimum cash holding in a firm?

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

  1. Keith V. Smith

  2. Miller and Orr

  3. William J. Baumol

  4. J.M. Keynes

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Correct Option: C

Technique of 'Transaction Analysis' was developed by __________.

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

  1. Elton Mayo

  2. Peter Drucker

  3. Eric Berne

  4. Adam Smith

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Correct Option: C

Many a time we read in newspaper about the benefits of National Electronic Funds Transfer (NEFT), a delivery service launched by the bank. Why do banks advocate for such delivery channels?
A. It is a system in which no physical transfer takes place, hence risk is very low.
B. In this system banks are not required to transfer any money actually to the account of the customer. Only book adjustment is done. Hence actual fund is not needed.
C. This facility is available to anybody at any place. Even having a bank account is not at all necessary.

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

  1. Only (A) is correct

  2. Only (B) is correct

  3. Only (C) is correct

  4. Both (A) and (B) are correct

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Correct Option: D
Explanation:

National Electronic Funds Transfer (NEFT) is a nation-wide payment system facilitating one-to-one funds transfer.

Under this Scheme, individuals can electronically transfer funds from any bank branch to any individual having an account with any other bank branch in the country participating in the Scheme.

Various banks in the country have installed machines which disburse money to general public. These machines are called _______.

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

  1. coin dispensing machines

  2. ATMs

  3. debit card machines

  4. ledger machines

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Correct Option: B
Explanation:

An ATM, which stands for automated teller machine, is a specialized computer that makes it convenient to manage a bank account holder's funds.
It allows a person to check account balances, withdraw or deposit money, print a statement of account activities or transactions, and even purchase stamps

Many times we see banks advertise - "Anywhere Banking: Anytime Banking". Which of the following products/facilities launched by banks make it possible for the customers to avail banking services 24 hours all seven days?
A. ATM
B. Internet Banking
C. Universal cheque book facility

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

  1. Only (A)

  2. Only (B)

  3. Both (A) and (B)

  4. All (A), (B) and (C)

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Correct Option: D
Explanation:

  • An automated teller machine (ATM) is an electronic telecommunications device that enables customers of financial institutions to perform financial transactions, such as cash withdrawals, deposits, transfer funds, or obtaining account information, at any time and without the need for direct interaction with bank staff.
  • Internet banking is an electronic payment system that enables customers of a bank or other financial institution to conduct a range of financial transactions through the financial institution's website.
  • A cheque is a document that orders a bank to pay a specific amount of money from a person's account to the person in whose name the cheque has been issued.
All these facilities are available to a customer all the time.

In which of the following fund transfer mechanisms, can funds be moved from one bank to another and where the transaction is settled instantly without being bunched with any other transaction?

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

  1. RTGS

  2. NEFT

  3. TT

  4. EFT

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Correct Option: A

The term 'Smart Money' refers to ________________.

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

  1. Foreign Currency

  2. Internet Banking

  3. US Dollars

  4. Credit Cards

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Correct Option: D