New Forms of Money

Q.

Distinguish between the nominal exchange rate and the real exchange rate. lf you were to decide whether to buy domestic goods or foreign goods, which rate would be more relevant? Explain.

Q.

Full-bodied money is that money whose money value and commodity value are:

1. declared as equal by the RBI

2. different in the market

3. declared as equal by the government

4. equal in the market

Q.

Dynamic functions of money are related to:

1. exchange of goods and services

2. valuation of goods and services

3. stability and growth of the economy

4. transfer of wealth across different parts of the economy

Q.

Money becomes a commodity when intrinsic value of money exceeds its face value. Defend or refute the statement.

Q.

When the money value of money exceeds the commodity value of money, it is called:

1. fiat money

2. fiduciary money

3. full bodied money

4. credit money

Q.

Commodity value of money has never been greater than the face value (or money value). Is this true?

Q.

Why do people hold notes and coins when it is clear that the intrinsic value (commodity value) of notes and coins is almost negligible?

Q. What is the difference between economic and non-economic activities?

Q.

Money which is accepted as a medium of exchange because of the trust between the payer and the payee is called:

1. full bodied money

2. credit money

3. fiat money

4. fiduciary money

Q.

Demand deposits are:

1. non-chequeable deposits

2. both (a) and (c)

3. deposits which can be withdrawn on demand

4. chequeable deposits

Q.

What is meant by public goods?

Q.

Money is a dynamic factor. How?

Q.

Paper money has intrinsic value. State true or false.

1. True

2. False

Q.

The total amount of currency notes and coins in circulation is called .

Q.

The cheque is also called:

1. Far Money

2. Near Money

3. Electronic Money

4. Full-bodied Money

Q.

Which of the following is the correct order in the evolution of money?

1. Gold, salt, notes, credit cards

2. Salt, gold, notes, credit cards

3. Gold, notes, credit cards, salt

4. Salt, credit cards, gold, notes

Q. What are demand deposits?

Q. The value of paper money today is dependent on the value.

1. representative
2. intrinsic
3. full bodied money
4. exclusive

Q.

What is currency?

Q.

Give an illustration of a petty cash book under an imprest system.

Q.

Which of the following defines fiat currency?

1. Their value is fixed by the government.

2. The intrinsic value is different from the face value.

3. It is declared legal tender.

4. None of the above

Q. State the types of inflation.

Q.

The cheque performs functions that are different from that of money. State true or false.

1. False

2. True

Q.

The process by which old and worn out notes are replaced by new ones in the economy is called

Q.

The value of paper money is dependent on:

1. Representative value

2. Intrinsic value

3. Full bodied money value

4. None of the above

Q.

The most important quality for coins to be used well these days is:

1. Uniformity

2. Light-weight

3. Divisibility

4. Durability

Q. An agreement, which in fact is a contract, between the RBI and Banks for the sale and repurchase of Govt securities and short-term treasury bills at a future date and for which the RBI indicates "the interest rate", is generally known as the _______________________.

1. REPO rate
2. prime lending rate
3. bank Rate
4. reverse REPO rate

Q. What does the terms of credit include?

Q. Currency Note containing political slogan is not a legal tender as per ________.

1. legal tender (Inscribed Notes) act
2. reserve bank of India act
3. negotiable instruments act
4. none of the above

Q. Distinguish between
Cash Credits and Overdraft Facility.