MCQ questions for class 12 Economics

MCQ questions for class 12 Economics


Q-1 The difference between narrow money and broad money is….

(a) coins and currencies

(b) only currency

(c) saving deposit of banks

(d) time deposits with bank


Q-2 Plastic money includes……

(a) debit cards

(b) credit cards

(c) prepaid cash cards

(d)All of the above


Q-3 The process of credit creation in an economy is affected by……

(a) the amount of initial deposit

(b) the LRR

(c) both a and b

(d) none of the above


Q-4 Banks not only accept deposit but also….. savings.

(a) distribute

(b) mobilise

(c) convert

(d) none


Q-5 …………involves discounting or purchasing of commercial bills arising out of credit sales.

(a) cash credit

(b) Bill financing

(c) Overdraft

(d) none of these


Q-6 Which is not a feature of balance of payment account?

(a) it includes economic transactions.

(b) it has given period of time

(c) it records only capital transactions

(d) Trade between resident of a country and rest of the world.


Q-7 Government transactions include…. to keep the BOP in balance and which are not carried out for profits.

(a) borrowings from IMF and other financial institutions

(b) grants and donations

(c) foreign exchange reserve

(d)both a and c


Q-8 which items in balance of payments are also called above the line items?

(a) Autonomous items

(b) Accomodating items

(c) Visible items

(d) invisible items


Q-9 what is the difference between the value of exports and value of imports of goods called?

(a) Balance of payments

(b) Balance of trade

(c) foreign exchange

(d) Disequilibrium


Q-10 Balance of payments deficit is calculated by taking into account the….. only.

(a) accommodating transactions

(b) autonomous transactions

(c) unilateral transactions

(d) none of the above


Q-11 demand deposit include..

(a) saving account deposit and fixed deposit

(b) saving account deposit and current account deposit

(c) current account deposit and fixed deposit

(d) all types of deposits


Q-12 a person can use more number of checks if he has

(a) saving deposit account

(b) current account

(c) fixed deposit account

(d) recurring deposit account


Q-13 Banks create credit

(a) on the basis of their securities

(b) on the basis of their total assets

(c) on the basis of their cash deposits

(d) on the basis of their gross liabilities


Q-14 As a custodian of nations reserves RBI keeps..

(a) reserves of foreign currencies

(b) reserves of gold

(c) reserves of foreign treasury bills

(d) All of the above


Q-15 ….. is the minimum rate at which central bank is prepared to give credit to the commercial banks.

(a) Repo rate

(b) Reverse repo

(c) CRR

( d) SLR


Q-16 Central Bank of a country does not a deal with…..

(a) state government

(b) general public

(c) Central government

(d) commercial banks


Q-17 the rate of interest offered by the bank to deposit holders is called the…

(a) bank rate

(b) borrowing rate

(c) lending rate

(d) inflation rate


Q-18 The Central Bank can increase availability of credit by

(a) raising repo rate

(b) racing reverse repo rate

(c) buying government securities

(d) selling government securities


Q-19 what can RBI do if it wants to increase credit in the economy?

(a) Decrease bank rate and CRR

(b) increase bank rate and CRR

(c) Increase bank rate and decreases CRR

(d) All of the above


Q-20 which is not a part of income receipt and payments from/ to abroad in BOP account?

(a) profits

(b) Grants

(c) interest

(d) Dividends