Money and Banking

19 solved questions from Class 12 Economics, each with the full working. Tap any question to see the step-by-step solution.

• 1 What is the primary topic or theoretical principle explored in 'Money and Banking' (Class 12 ECONOMICS)? medium MCQ Chapter Core Principle
• 2 Which key mechanism or analytical rule is highlighted in 'Money and Banking'? medium MCQ Key Analytical Mechanism
• 3 What is the primary topic or principle explained in 'Money and Banking' (Class 12 Economics)? medium MCQ Chapter Core Concept
• 4 Which key observation or fact is central to understanding 'Money and Banking'? medium MCQ Key Fact & Mechanism
• 5 Why is the study of 'Money and Banking' important for students of Class 12? medium MCQ Learning Significance
• 6 What is a common application or real-world example related to 'Money and Banking'? medium MCQ Real World Application
• 7 What key takeaway should students retain after completing 'Money and Banking'? medium MCQ Chapter Summary & Takeaway
• 8 The Reserve Bank of India has set the cash reserve ratio (CRR) at 4% and the statutory liquidity ratio (SLR) at 6%. If the public holds no cash and banks keep exactly the required reserves, what is the money multiplier? medium 2 marks Money multiplier (CRR+SLR)
• 9 Explain how the Reserve Bank of India can use open market operations (OMO) to curb rising inflation. Illustrate your answer with a short example involving the purchase or sale of government securities. medium 4 marks Open market operations as a monetary tool
• 10 Total deposits in Indian commercial banks amount to Rs. 5,00,000 crore. The public holds cash worth Rs. 50,000 crore. The RBI has fixed the cash reserve ratio (CRR) at 5% and the statutory liquidity ratio (SLR) at 4%. Banks also keep an excess reserve of 2% of deposits. Calculate the total credit that can be created by the banking system. hard 5 marks Credit creation process (reserves and cash holdings)
• 11 Which of the following is NOT a function of money? 1. Medium of exchange 2. Unit of account 3. Store of value 4. Means of production easy MCQ 1 mark Functions of money
• 12 If the Reserve Bank of India sets the cash reserve ratio (CRR) at 4% and the statutory liquidity ratio (SLR) at 6%, what is the money multiplier? medium MCQ 2 marks Calculation of money multiplier
• 13 Total deposits in Indian commercial banks are Rs. 8,00,000 crore. The cash reserve ratio (CRR) is 5%, statutory liquidity ratio (SLR) is 4% and banks keep excess reserves equal to 1.5% of deposits. Calculate the maximum credit that can be created by the banking system. easy 2 marks Credit creation calculation
• 14 Explain how the Reserve Bank of India can use open market operations to curb rising inflation. Illustrate your answer with a short example involving the sale of government securities worth Rs. 5 lakh to the commercial banks. hard 4 marks OMO to control inflation
• 15 Which of the following is NOT a tool used by the Reserve Bank of India to control the money supply? medium MCQ 2 marks RBI monetary tools
• 16 If the Reserve Bank of India sets the Cash Reserve Ratio at 6% and the Statutory Liquidity Ratio at 8%, what is the total amount of reserves that a commercial bank must hold per ₹100 of deposits? easy MCQ 1 mark Reserve requirement calculation
• 17 RBI has fixed the Cash Reserve Ratio at 4% and the Statutory Liquidity Ratio at 5%. If the public holds 30% of the total deposits in cash, what is the money multiplier? medium 2 marks Money multiplier calculation
• 18 Explain how the Reserve Bank of India can use open market operations to curb rising inflation. Illustrate your answer with a short example involving the sale of government securities worth ₹2 lakh to commercial banks. Discuss the effect on the money supply and the repo rate. hard 5 marks OMO impact on money supply and interest rates
• 19 Total deposits of a group of commercial banks amount to ₹10,000 crore. The Cash Reserve Ratio is 5%, the Statutory Liquidity Ratio is 4%, and banks keep excess reserves equal to 1% of deposits. Calculate the maximum credit that can be created by this banking system. medium 2 marks Credit creation with excess reserves