Anything used as money must be:
1.Fixed in value
2.Fixed in supply
3.Legal tender
4.Readily acceptable
Government securities:
1.Mean currency
2. Are near money
3.Are bought and sold on stock exchange market
4.(b) and (c) of above
If money supply in a country decreases:
1. Prices will rise
2.Prices will fall
3.Rate of interest falls
4.(b) and (c) of above
Inflation is a situation when :
1.Prices of some goods rise
2. General price level rises continuously
3.Prices double every year
4.Prices rise and fall
It implements monetary policy of the country:
1.Central bank
2.Commercial banks
3.Specialised bank
4.Finance department
It is a kind of money:
1.Credit money
2.Discredit money
3.Trust money
4.False money
Liquidity of a monetary asset means:
1.Velocity of circulation of money
2.Easy availability of oney
3. Ready acceptability of monetary asset
4.The monetary asset has lost it value
Purchasing power of money during deflation is:
1.Reduced
2.Increased
3.Constant
4.Fluctuating
Speculative demand for money depends upon:
1.Income
2.Investment
3.Rate of interest
4.Central bank
Which does NOT represent a method of payment?
1.Cheque
2.Saving certificate
3.Currency note
4. Bill of exchange
Which of the following increases money supply in the country?
1.Purchase of bonds by State Bank
2. Sale of bonds by State Bank
3.Increase in discount rate
4.Decrease in taxes
Which one is equation of exchange?
1.PT = MV
2.PV = MT
3.PM = TV
4.None of these
A student records her income and spending for past month she uses the funtion of money
1.Medium of exchange
2.Standard of deferred payments
3.Store of value
4.Unit of account
Banks discount it and advance loans:
1.Draft
2.Bill of exchange
3.Pay order
4.Gold
Government of Pakistan issues currency on the basis of:
1.Availability of gold in the country
2.Availability of dollars in the country
3.Demand for money in the country
4.Tax collection
If no money is used to exchange goods it is called:
1.Barter
2.Currency
3.Black market
4.Free trade
If quantity of money increases 100% other things remaining constant value of money changes by:
1.Increases by 100%
2.Decreases by 100%
3. Decreases by 200%
4.Does not change
In Pakistan money of account is:
1.Paisa
2.Rupee
3.Gold
4.Dollar
In the equation MV = PY M represents:
1.Money supply
2.Money demand
3.Maximum output
4.Minimum output
In the equation MV = PY V represents:
1.Value of money
2.Velocity of circulation of money
3.Variation of nation income
4.All of the above
Inflation can be controlled by applying:
1.Monetary and fiscal policies
2.Monetary and labour policy
3.Fiscal and commercial policies
4.All of the above
It can change money supply:
1.National Assembly
2.Supreme Court
3.Government
4.State Bank
It is included in kinds of money:
1.Legal money
2.Credit money
3.Token money
4.All of the above
Paper money in Pakistan is:
1.Convertible
2.Inconvertible
3.Linked to gold
4.None of the above
The govt. can control inflation by:
1. Increasing demand for goods
2.Increasing supply of goods
3. Increasing money supply
4.Decreasing taxes
Velocity of circulation of money means the number of times a unit of money
1.Changes hands daily
2.Changes hands monthly
3.Changes hands annually
4. Changes purchasing power
When value of money falls they benefit more:
1.Farmers
2.Industrialist
3.Lenders
4.Debtors
Which people are most likely to gain during inflation?
1.Those living on pension
2.Those living on their savings
3.Those who are repaying borrowed money
4.Those who have lent money
Which property paper money does NOT Possess
1.Acceptability
2.Divisibility
3.Durability
4.Portability
A saving account in a bank represents the function of money:
1. A measure of value
2.A medium of exchange
3.A standard for deferred payments
4.Store of value
According to Keynes demand for money is affected by:
1. Income
2.Rate of interest
3.Literacy rate
4.Both (a) & (b)
Accourding to Keynes motives for holding money are:
1.Two
2.Three
3.Four
4.Five
Barter has the defect:
1.Goods exchanged are of inferior quality
2.Goods cannot be exchanged for services
3. Lack of common measure of value
4.None of the above
Barter means:
1.Trade through metallic money only
2.Trade of goods only excluding services
3.Trade of very low value goods
4.Trade without use of money
Cash cannot be directly drawn from a bank against:
1.Cross cheque
2.Order cheque
3.Bearer cheque
4.Traveller cheque
Cheque is:
1.Legal money
2.Credit money
3.Paper money
4.Not money
Commercial banks create:
1.Credit money
2.Token money
3.Legal money
4.Do not create money
Convertible money means:
1.It can buy goods
2.. Govt. can give gold against it
3.Illegal money
4.Low value money
Cross cheque has a cross sign (X) in the:
1.Right side upper corner
2. Right side lower corner
3.Left side upper corner
4. It does not have cross sign (X)
Cross cheque means:
1.It has been cancelled
2. Cash cannot be directly drawn from the bank
3.It has two lines drawn in left upper corner
4.(b) and (c) of above
Cross cheque:
1.Is issued only by a business firm
2. Is not accepted by banks
3. Ensures immediate payment of cash to the holder
4.None of the above
During inflation:
1.Lenders lose borrowers gain
2.Borrowers lose lenders gain
3.Borrowers and lenders both lose
4.All sections of the society gain
In Pakistan in the year 2007-08 money supply was about
1.Rs. 3400 million
2.Rs. 3400 billion
3. Rs. 3400 trillion
4.Uncountable
In payment of debt people can use this kind of money:
1.Legal money
2.Credit money
3. Real money
4.(a) and (b) of the above
It is the medium of exchange:
1.Black money
2.Near money
3.Currency
4.Foreign exchange
It is true to say about kinds of inflation:
1.Demand pull and cost push inflation
2.Demand pull and cost push industry
3.Demand pull and income pull inflation
4.None of the above
Legal money is called so because:
1.The buyer must pay in that money
2.Can be converted into gold
3.Sellers do not accept any other money
4.It is official medium of exchange
Money material should be:
1.Abundant
2.Scarce
3.Beautiful
4.Heavy
Paper money came into use:
1.100 years ago
2.200 years ago
3. 1000 years ago
4.2000 years ago
Paper money is called fiat money because
1. It is issued with authority of government
2. It is convertible into gold
3.It can be easily printed
4.It is light weight
Quantity of money has relation with value of money:
1.Direct
2.Indirect
3.Inverse
4.No relation
Quantity Theory of Money explains that:
1.Value of money depends upon quantity of money
2. Rate of interest depends upon quantity of money
3.Quantity of investment depends upon quantity of money
4.Supply of money depends upon quantity of money
Rupee is a coin:
1.Full value
2.Token money
3.Credit money
4.Convertible
Ten-rupee note is:
1.Token money
2.Credit money
3.Legal money
4.(a) and (c) of above
The equation of exchange PT = MV was given by:
1.Fisher
2.Crowther
3.Kuznet
4.Keynes
The most important feature of money:
1.General acceptability
2.Convertibility into gold
3.Store of value
4.Medium of exchange
The quantity demanded of money rises:
1. As the interest rises
2.As the interest rate falls
3.As the supply of money falls
4.As the number of banks rises
This is a characteristic of good money:
1. High intrinsic value
2.Liquidity
3.Attractive design
4.Easy to duplicate
This is NOT money
1.Currency
2.Prize bond
3.Demand deposit in a bank
4.Coins
Treasury Bill is a document used for:
1.A short-term loan to the exporter
2.A long-term loan to the government
3.A short-term loan to the government
4.A short-term loan to a govt. employee
Under normal circumstances the velocity of circulation of money in a country is:
1.100%
2.Negative
3.Less than 10
4.Zero
Value of money in Pakistan is determined by:
1.Govt. of Pakistan
2.State Bank
3.General price level
4.Value of doller
What will promote savings?
1.Increase in credit facilities
2.Increase in taxation
3. Increase in personal incomes
4.Rising prices
Which is money:
1.Check
2.Credit card
3.Currency
4.Prize bond
Which is NOT a desirable characteristic of money?
1.Portable
2.Uniform
3.Easily recognised
4.Easily duplicated
Which is not the function of money:
1.Make demand and supply equal
2.Store of value
3.Medium of exchange
4.Measure of value
Which is the characteristic of a good money:
1.Has good design
2.Has high value
3.Has a fixed value in gold
4.Is readily accepted by people
Which property the paper money does not possess:
1.Acceptability
2.Divisibility
3.Duability
4.Portability
With reference to currency system of a country token money means:
1.Token tax
2.The money which has no purchasing power
3.The money which has higher face value
4.Advance payment to purchase something