R4RIN – MCQs, Mock Tests | Economics Economics Money and Value of Money

Rupee is a coin:

1. Full value
2. Token money
3. Credit money
4. Convertible

✅ Correct Answer: 2

Cash cannot be directly drawn from a bank against:

1. Cross cheque
2. Order cheque
3. Bearer cheque
4. Traveller cheque

✅ Correct Answer: 1

Money material should be:

1. Abundant
2. Scarce
3. Beautiful
4. Heavy

✅ Correct Answer: 2

In Pakistan money of account is:

1. Paisa
2. Rupee
3. Gold
4. Dollar

✅ Correct Answer: 2

If no money is used to exchange goods it is called:

1. Barter
2. Currency
3. Black market
4. Free trade

✅ Correct Answer: 1

Which is not the function of money:

1. Make demand and supply equal
2. Store of value
3. Medium of exchange
4. Measure of value

✅ Correct Answer: 1

Which is money:

1. Check
2. Credit card
3. Currency
4. Prize bond

✅ Correct Answer: 3

Convertible money means:

1. It can buy goods
2. . Govt. can give gold against it
3. Illegal money
4. Low value money

✅ Correct Answer: 2

Barter has the defect:

1. Goods exchanged are of inferior quality
2. Goods cannot be exchanged for services
3. Lack of common measure of value
4. None of the above

✅ Correct Answer: 3

Legal money is called so because:

1. The buyer must pay in that money
2. Can be converted into gold
3. Sellers do not accept any other money
4. It is official medium of exchange

✅ Correct Answer: 4

It is the medium of exchange:

1. Black money
2. Near money
3. Currency
4. Foreign exchange

✅ Correct Answer: 3

The govt. can control inflation by:

1. Increasing demand for goods
2. Increasing supply of goods
3. Increasing money supply
4. Decreasing taxes

✅ Correct Answer: 2

Government of Pakistan issues currency on the basis of:

1. Availability of gold in the country
2. Availability of dollars in the country
3. Demand for money in the country
4. Tax collection

✅ Correct Answer: 3

Quantity of money has relation with value of money:

1. Direct
2. Indirect
3. Inverse
4. No relation

✅ Correct Answer: 3

Commercial banks create:

1. Credit money
2. Token money
3. Legal money
4. Do not create money

✅ Correct Answer: 1

Cheque is:

1. Legal money
2. Credit money
3. Paper money
4. Not money

✅ Correct Answer: 4

The most important feature of money:

1. General acceptability
2. Convertibility into gold
3. Store of value
4. Medium of exchange

✅ Correct Answer: 1

It can change money supply:

1. National Assembly
2. Supreme Court
3. Government
4. State Bank

✅ Correct Answer: 4

Which of the following increases money supply in the country?

1. Purchase of bonds by State Bank
2. Sale of bonds by State Bank
3. Increase in discount rate
4. Decrease in taxes

✅ Correct Answer: 1

Paper money came into use:

1. 100 years ago
2. 200 years ago
3. 1000 years ago
4. 2000 years ago

✅ Correct Answer: 2

Which property the paper money does not possess:

1. Acceptability
2. Divisibility
3. Duability
4. Portability

✅ Correct Answer: 3

A saving account in a bank represents the function of money:

1. A measure of value
2. A medium of exchange
3. A standard for deferred payments
4. Store of value

✅ Correct Answer: 4

A student records her income and spending for past month she uses the funtion of money

1. Medium of exchange
2. Standard of deferred payments
3. Store of value
4. Unit of account

✅ Correct Answer: 4

It implements monetary policy of the country:

1. Central bank
2. Commercial banks
3. Specialised bank
4. Finance department

✅ Correct Answer: 1

Which property paper money does NOT Possess

1. Acceptability
2. Divisibility
3. Durability
4. Portability

✅ Correct Answer: 3

Anything used as money must be:

1. Fixed in value
2. Fixed in supply
3. Legal tender
4. Readily acceptable

✅ Correct Answer: 4

What will promote savings?

1. Increase in credit facilities
2. Increase in taxation
3. Increase in personal incomes
4. Rising prices

✅ Correct Answer: 3

Treasury Bill is a document used for:

1. A short-term loan to the exporter
2. A long-term loan to the government
3. A short-term loan to the government
4. A short-term loan to a govt. employee

✅ Correct Answer: 3

Which does NOT represent a method of payment?

1. Cheque
2. Saving certificate
3. Currency note
4. Bill of exchange

✅ Correct Answer: 2

Which is NOT a desirable characteristic of money?

1. Portable
2. Uniform
3. Easily recognised
4. Easily duplicated

✅ Correct Answer: 4

Speculative demand for money depends upon:

1. Income
2. Investment
3. Rate of interest
4. Central bank

✅ Correct Answer: 3

If money supply in a country decreases:

1. Prices will rise
2. Prices will fall
3. Rate of interest falls
4. (b) and (c) of above

✅ Correct Answer: 2

In the equation MV = PY V represents:

1. Value of money
2. Velocity of circulation of money
3. Variation of nation income
4. All of the above

✅ Correct Answer: 2

In the equation MV = PY M represents:

1. Money supply
2. Money demand
3. Maximum output
4. Minimum output

✅ Correct Answer: 1

Accourding to Keynes motives for holding money are:

1. Two
2. Three
3. Four
4. Five

✅ Correct Answer: 2

Quantity Theory of Money explains that:

1. Value of money depends upon quantity of money
2. Rate of interest depends upon quantity of money
3. Quantity of investment depends upon quantity of money
4. Supply of money depends upon quantity of money

✅ Correct Answer: 1

Cross cheque has a cross sign (X) in the:

1. Right side upper corner
2. Right side lower corner
3. Left side upper corner
4. It does not have cross sign (X)

✅ Correct Answer: 4

Cross cheque means:

1. It has been cancelled
2. Cash cannot be directly drawn from the bank
3. It has two lines drawn in left upper corner
4. (b) and (c) of above

✅ Correct Answer: 4

It is true to say about kinds of inflation:

1. Demand pull and cost push inflation
2. Demand pull and cost push industry
3. Demand pull and income pull inflation
4. None of the above

✅ Correct Answer: 1

Liquidity of a monetary asset means:

1. Velocity of circulation of money
2. Easy availability of oney
3. Ready acceptability of monetary asset
4. The monetary asset has lost it value

✅ Correct Answer: 3

Barter means:

1. Trade through metallic money only
2. Trade of goods only excluding services
3. Trade of very low value goods
4. Trade without use of money

✅ Correct Answer: 4

With reference to currency system of a country token money means:

1. Token tax
2. The money which has no purchasing power
3. The money which has higher face value
4. Advance payment to purchase something

✅ Correct Answer: 3

Ten-rupee note is:

1. Token money
2. Credit money
3. Legal money
4. (a) and (c) of above

✅ Correct Answer: 4

Paper money in Pakistan is:

1. Convertible
2. Inconvertible
3. Linked to gold
4. None of the above

✅ Correct Answer: 2

Government securities:

1. Mean currency
2. Are near money
3. Are bought and sold on stock exchange market
4. (b) and (c) of above

✅ Correct Answer: 4

Which is the characteristic of a good money:

1. Has good design
2. Has high value
3. Has a fixed value in gold
4. Is readily accepted by people

✅ Correct Answer: 4

This is a characteristic of good money:

1. High intrinsic value
2. Liquidity
3. Attractive design
4. Easy to duplicate

✅ Correct Answer: 2

It is a kind of money:

1. Credit money
2. Discredit money
3. Trust money
4. False money

✅ Correct Answer: 1

This is NOT money

1. Currency
2. Prize bond
3. Demand deposit in a bank
4. Coins

✅ Correct Answer: 2

Cross cheque:

1. Is issued only by a business firm
2. Is not accepted by banks
3. Ensures immediate payment of cash to the holder
4. None of the above

✅ Correct Answer: 4

It is included in kinds of money:

1. Legal money
2. Credit money
3. Token money
4. All of the above

✅ Correct Answer: 4

In payment of debt people can use this kind of money:

1. Legal money
2. Credit money
3. Real money
4. (a) and (b) of the above

✅ Correct Answer: 4

Purchasing power of money during deflation is:

1. Reduced
2. Increased
3. Constant
4. Fluctuating

✅ Correct Answer: 2

Velocity of circulation of money means the number of times a unit of money

1. Changes hands daily
2. Changes hands monthly
3. Changes hands annually
4. Changes purchasing power

✅ Correct Answer: 3

The equation of exchange PT = MV was given by:

1. Fisher
2. Crowther
3. Kuznet
4. Keynes

✅ Correct Answer: 1

Value of money in Pakistan is determined by:

1. Govt. of Pakistan
2. State Bank
3. General price level
4. Value of doller

✅ Correct Answer: 3

When value of money falls they benefit more:

1. Farmers
2. Industrialist
3. Lenders
4. Debtors

✅ Correct Answer: 4

Which one is equation of exchange?

1. PT = MV
2. PV = MT
3. PM = TV
4. None of these

✅ Correct Answer: 1

Inflation can be controlled by applying:

1. Monetary and fiscal policies
2. Monetary and labour policy
3. Fiscal and commercial policies
4. All of the above

✅ Correct Answer: 1

Inflation is a situation when :

1. Prices of some goods rise
2. General price level rises continuously
3. Prices double every year
4. Prices rise and fall

✅ Correct Answer: 2

Under normal circumstances the velocity of circulation of money in a country is:

1. 100%
2. Negative
3. Less than 10
4. Zero

✅ Correct Answer: 3

In Pakistan in the year 2007-08 money supply was about

1. Rs. 3400 million
2. Rs. 3400 billion
3. Rs. 3400 trillion
4. Uncountable

✅ Correct Answer: 1

Banks discount it and advance loans:

1. Draft
2. Bill of exchange
3. Pay order
4. Gold

✅ Correct Answer: 2

Paper money is called fiat money because

1. It is issued with authority of government
2. It is convertible into gold
3. It can be easily printed
4. It is light weight

✅ Correct Answer: 1

According to Keynes demand for money is affected by:

1. Income
2. Rate of interest
3. Literacy rate
4. Both (a) & (b)

✅ Correct Answer: 4

During inflation:

1. Lenders lose borrowers gain
2. Borrowers lose lenders gain
3. Borrowers and lenders both lose
4. All sections of the society gain

✅ Correct Answer: 1

The quantity demanded of money rises:

1. As the interest rises
2. As the interest rate falls
3. As the supply of money falls
4. As the number of banks rises

✅ Correct Answer: 2

Which people are most likely to gain during inflation?

1. Those living on pension
2. Those living on their savings
3. Those who are repaying borrowed money
4. Those who have lent money

✅ Correct Answer: 3

If quantity of money increases 100% other things remaining constant value of money changes by:

1. Increases by 100%
2. Decreases by 100%
3. Decreases by 200%
4. Does not change

✅ Correct Answer: 2