Important Questions for CBSE Class 12 Economics Chapter 3

Important Questions with Answers for Class 12 CBSE Economics Chapter 3 – Money and Banking which is outlined by expert Economics teachers from the latest version of CBSE (NCERT) books.

CBSE Class 12 Macro Economics Chapter- 3 Important Questions

Question 1

Central Bank is a/an,

  • Apex Bank
  • Rural Bank
  • Regional bank
  • Commercial Bank

Answer: Apex Bank

Question 2

Legal service ratio is equal to,

  • CRR/SLR
  • CRR – SLR
  • SLR – CLR
  • CRR + SLR

Answer: CRR + SLR

Question 3

Calculate the value of money multiplier and the total deposit created if the initial amount is ₹. 700 crores and LRR is 10%.

Answer: Value of money multiplier = 1/LRR which is equal to 1/0.1 = 10

Initial deposit was ₹. 700 crores

Thus, Total deposit will be Initial Deposit x Money Multiplier

= 700 X 10

= ₹. 7,000 crores

Question 4

Calculate LRR, if the initial deposit of ₹. 500 crores lead to the establishment of total deposits of ₹. 4,000 crores.

Answer: Money Multiplier = Total deposits / Initial deposits

= 4,000 / 500 = 4

Thus, money multiplier = 1/LRR

8 = 1/LRR

LRR = 1.25 or 12.5

Question 5

If total deposits created by the commercial banks are ₹. 12,000/-, LRR is 25%. Calculate the initial deposit.

Answer: Money Multiplier = 1/LRR = 1/025 = 4

Initial deposit = Total deposit / Money Multiplier

= 12,000/4

= ₹. 3,000/-

Question 6

One of the measures of the money supply is,

  • O1
  • N1
  • M1
  • P1

Answer: M1

Question 7

Money is a medium of,

  • Communication
  • Barter
  • Exchange
  • Speculation

Answer: Exchange

Question 8

Money is something that is,

  • Universally accepted
  • Locally accepted
  • Accepted by banks
  • Regionally accepted

Answer: Universally accepted

Question 9

One drawback of barter exchange is,

  • Lack of trust
  • Lack of coincidence of wants
  • Lack of double coincidence of wants
  • Lack of goods

Answer: Lack of double coincidence of wants

Question 10

Money overcomes the issues of the barter system.

  • Can’t say
  • Seldom
  • 0
  • 1

Answer: 1

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