Banking Awareness Quiz for Bank Exams 2021- 26th April

Q1. Paper Money issued on the credit of a bank or government is called……………….
(a)Fiduciary money
(b)Fiat money
(c)Commodity money
(d)Representative money
(e)None of these

Q2. What are the three measures of money supply?
(a)M2
(b)M1
(c)M3
(d)All of the above
(e)M5

Q3. How many types of cash are there?
(a)Money market fund
(b)Treasury bills
(c)Marketable securities
(d)Commercial paper
(e)All of the above

Q4. In which year does Reserve Bank of India introduced the concept of classification of money into M1, M2, M3 and so on?
(a)1981
(b)1971
(c)1987
(d)1977
(e)1959

Q5. Which of the following is a form of money with an intrinsic value?
(a)Call Money
(b)Representative Money
(c)Commodity Money
(d)Fiat Money
(e)None of these

Q6. Which of the following is not one of the basic functions of money?
(a)A unit of account
(b)A means of calculating real value
(c)A medium of exchange
(d)A store of value
(e)None of these

Q7. Which of the following is the best example of how money is used as a medium of exchange?
(a)Real prices
(b)Interest rates
(c)Exchange rates
(d)Nominal prices
(e)None of these

Q8. What is a money personality?
(a)Savers
(b)Investors
(c)Big spenders
(d)Debtors
(e)All of the above

Q9. Which of the following is the best example of fiat money?
(a)Diamonds
(b)Paper money
(c)Bonds
(d)Gold bullion
(e)None of these

Q10. Which of the following is the best example of commodity money?
(a)Bonds
(b)Coinage
(c)Gold bullion
(d)Paper money
(e)None of these

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Solutions

S1.Ans(a)
Sol. Fiduciary Money that depends for its value on confidence is an accepted medium of exchange. It originated as a paper certificate that was promise to pay a certain amount of goldor silver to the bearer.

S2.Ans(d)
Sol. Provides three measures of money – M1, M2, and M3, where M1 is the narrowest and M3 the broadest.

S3.Ans(e)
Sol. There are five types of cash equivalents: Treasury bills, commercial paper, marketable securities, money market funds, and short-term government bonds.

S4.Ans(d)
Sol. Reserve Bank of India introduced the concept of classification of money into M1, M2, M3 in 1977.

S5.Ans(c)
Sol.Commodity Money is a form of Money with an intrinsic value.

S6.Ans(b)
Sol. A means of calculating real value is not one of the basic functions of money.

S7.Ans(d)
Sol.Nominal prices are the best example to use as a medium of exchange.

S8.Ans(e)
Sol. Five common money personalities are investors, savers, big spenders, debtors, and shoppers.

S9.Ans(b)
Sol. Paper money is the best example of fiat money.

S10.Ans(c)
So.Gold bullionis is the best example of commodity money.

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