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Group A Economics Chapter Money Banking and International Trade MCQs:

The Central Superior Services (denoted as CSS; or Bureaucracy) is an elite permanent bureaucratic authority, and the civil service that is responsible for running the civilian bureaucratic operations and government secretariats and directorates of the Cabinet of Pakistan.

Central Superior Services (CSS) -> Group A -> Economics -> Money Banking and International Trade

Question:

Money is ?

A: The same as income
B: The value of all coins and currency in circulation at any time
C: Anything that is generally accepted as a medium of exchange
D: All of the above
Answer: C
irammalik

Question:

An example of fiat money is ?

A: Silver coins
B: Paper euros
C: gold
D: cigarettes
Answer: B

Question:

Which of the following statements about money is not true ?

A: Wealth held in the current account you hold with your bank is almost as convenient for buying things as wealth held in your wallet so the wealth in current accounts should be included in measures of money
B: A debit card is not really money because it is only a means of transferring money between accounts
C: All the wealth that people hold, in whatever form, should be considered as money
D: In a complex economy it is not easy to draw a clear dividing line between assets that should be considered as money and those that should not
Answer: C

Question:

If the banks in an economy operate with a reserve ratio of 20 percent then the money multiplier is ?

A: 25
B: 4
C: 20
D: 5
Answer: D

Question:

Reserve requirements that may be imposed on an economy’s banks by its central bank specify that banks by its central bank specify that banks reserve must be a minimum percentage of them ?

A: loans
B: assets
C: deposits
D: government bonds
Answer: C

Question:

The refinancing rate is ?

A: The interest rates the public pays when borrowing from banks
B: The interest rate at Which commercial banks lend to and borrow from each other
C: The interest rate the European Central Bank pays on reserves
D: The interest rates the European Central Bank charges on loans to banks E. He interests rate banks pay on the public’s deposits
Answer: B

Question:

Suppose all banks maintain a 100 percent reserve ratio. If an individual deposits Rs 1,000 of currency in a bank ?

A: the money supply decrease by less than Rs 1,000
B: the money supply increases by more than Rs 1,000
C: the money supply increase by less than Rs 1,000
D: the money supply decrease by more than Rs 1,000 E. The money supply is unaffected
Answer: B
gabeena

Question:

Suppose the central bank purchases a government bond from a person who deposits the entire amount received from the sale in her bank the money supply will ?

A: fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio
B: rise by an amount that depends on the bank’s reserve ratio
C: rise by less than the amount of the deposit
D: fall by exactly the amount of the deposit as long as the bank does not change its reserve ratio E. be unchanged
Answer: B

Question:

Money that a government has required has required to be accepted in settlement of debts is ?

A: legal tender
B: barter money
C: currency value
D: commodity money
Answer: A
Sanwal

Question:

A checking deposit in a bank in considered _________ of that bank?

A: net worth
B: an asset
C: capital
D: a liability
Answer: D

Question:

The difference between a bank’s actual reserves and its required reserves is its?

A: excess reserves
B: required reserve ratio
C: profit margin
D: net worth
Answer: A
Shahnaz

Question:

A bank has excess reserves to lend but is unable to find anyone to borrow the money This will _________ the size of the money multiplier?

A: increase
B: reduce
C: have no effect on
D: double
Answer: B