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12th Standard Economics Monetary Economics English Medium Free Online Test One Mark Questions 2020 - 2021

12th Standard

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Economics

Time : 00:20:00 Hrs
Total Marks : 20

    Answer all the questions

    20 x 1 = 20
  1. The RBI Headquarters is located at

    (a)

    Delhi

    (b)

    Chennai

    (c)

    Mumbai

    (d)

    Bengaluru

  2. ___________inflation occurs when general prices of commodities increases due to increase in production costs such as wages and raw materials.

    (a)

    Cost-push

    (b)

    demand pull

    (c)

    running

    (d)

    galloping

  3. _________is a decrease in the rate of inflation.

    (a)

    Disinflation

    (b)

    Deflation

    (c)

    Stagflation

    (d)

    Depression

  4. The study of alternating fluctuations in business activity is referred to in Economics as

    (a)

    Boom

    (b)

    Recession

    (c)

    Recovery

    (d)

    Trade cycle

  5. Fisher’s Quantity Theory of money is based on the essential function of money as

    (a)

    measure of value

    (b)

    store of value

    (c)

    medium of exchange

    (d)

    standard of deferred payment

  6. Inflation is taxation without legislation' was said by______

    (a)

    Rudi Dorbush

    (b)

    Adam smith

    (c)

    Milton Friedman

    (d)

    Alfred Marshall

  7. "The purchasing power of money" was a book published by________in 1911

    (a)

    J.M. Keynes

    (b)

    Irving Fisher

    (c)

    Adam smith

    (d)

    Ricardo

  8. Irving Fisher'_______s was published in 1911.

    (a)

    Quantity theory of money

    (b)

    Liquidity preference

    (c)

    Quality theory of money

    (d)

    Both 'b' and 'c'

  9. Gold Standard is a system in which the value of the monetary unit or the standard currency is_____ linked with gold.

    (a)

    directly

    (b)

    indirectly

    (c)

    positively

    (d)

    negatively

  10. In India, ______ are issued by the Reserve Bank of India (RBI) and ______ are issued by the Ministry of Finance, Government of India (GOI).

    (a)

    coins and currency notes

    (b)

    currency notes and coins

    (c)

    currency notes and pass books

    (d)

    none of the above

  11. What is SLR?

    (a)

    It is the fraction of the total demand and time deposits of the commercial banks is the form of specified liquid assets

    (b)

    Reserve Money consists of two things (a) vault cash in banks and (b) deposits of commercial banks with RBI.

    (c)

    It is the fraction of the deposits the banks must keep with RBI.

    (d)

    It is the ratio of money held by the public in currency to that they hold in bank deposits

  12. According to Marshall’s equation, the value of money is influenced not only by changes in M, but also by changes in

    (a)

    K

    (b)

    P

    (c)

    Kl

    (d)

    Pl

  13. Who said the following statement? “A state of abnormal increase in the quantity of purchasing power?

    (a)

    Fisher

    (b)

    Gregorye

    (c)

    Marshall

    (d)

    Keynes

  14. When prices rise rapidly like the running of a horse at a rate of speed of _____ per annum, it is called running inflation.

    (a)

    1% - 2 %

    (b)

    100% - 200 %

    (c)

    10% - 20%

    (d)

    None of the above

  15. Stagflation is a combination of stagnant economic growth, high unemployment and high inflation ______?

    (a)

    high inflation

    (b)

    low inflation

    (c)

    no inflation

    (d)

    disinflation

  16. In the Cambridge equation of M = kPY, the value of k is:

    (a)

    M/V

    (b)

    1/V

    (c)

    V in Fisher’s equation

    (d)

    None of these

  17. Assertion (A): Fisher extended his original equation of exchange to include bank deposits M1 and its velocity V1.
    Reason (R): In a modern economy, bank’s demand deposits or credit money and its velocity play a vital part in business.

    (a)

    Both A and R are true and R is the correct explanation of A.

    (b)

    Both A and R are true but R is not the correct explanation of A

    (c)

    A is true but R is fals

    (d)

    A is false but R is true.

  18. Inflation is measured by the
    I. consumer price index (CPI).
    II. GDP deflator.
    III. current account.
    IV. depreciation.

    (a)

    I and II only.

    (b)

    I and III only.

    (c)

    III and IV only.

    (d)

    I, II and III.

  19. Which of the following are costs of inflation?
    I. Inflation weakens the creation of credit and capital markets.
    II. Inflation distorts business behavior, especially investment behavior.
    III. Inflation increases the prices of foreign goods relative to domestic goods.
    IV. Inflation imposes a tax on the holders of money.

    (a)

    I and II only

    (b)

    III and IV only

    (c)

    I, II and IV only

    (d)

    I, II and III only

  20. Match the correct codes

    1 It is the ratio of money held by the public in currency
    to that they hold in bank deposits.
    i CRR
    2 Reserve Money consists of two things (a) vault cash in
    banks and (b) deposits of commercial banks with RBI
    ii SLR
    3 It is the fraction of the deposits the banks must keep with RBI iii RDR
    4 It is the fraction of the total demand and time deposits
    of the commercial banks is the form of specified liquid assests
    iv CDR
    (a)

    (1) – (i) (2) – (ii) (3) – (iv) (4) – (iii)

    (b)

    (1) – (ii) (2) – (iii) (3) – (iv) (4) – (i)

    (c)

    (1) – (iv) (2) – (iii) (3) – (i) (4) – (ii)

    (d)

    (1) – (i) (2) – (ii) (3) – (iii) (4) – (iv)

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