Anything used as money must be:
1.Fixed in value
2.Fixed in supply
3.Legal tender
4.Readily acceptable
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Government securities:
1.Mean currency
2. Are near money
3.Are bought and sold on stock exchange market
4.(b) and (c) of above
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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
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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
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It implements monetary policy of the country:
1.Central bank
2.Commercial banks
3.Specialised bank
4.Finance department
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It is a kind of money:
1.Credit money
2.Discredit money
3.Trust money
4.False money
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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
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Purchasing power of money during deflation is:
1.Reduced
2.Increased
3.Constant
4.Fluctuating
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Speculative demand for money depends upon:
1.Income
2.Investment
3.Rate of interest
4.Central bank
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Which does NOT represent a method of payment?
1.Cheque
2.Saving certificate
3.Currency note
4. Bill of exchange
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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
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Which one is equation of exchange?
1.PT = MV
2.PV = MT
3.PM = TV
4.None of these
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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
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Banks discount it and advance loans:
1.Draft
2.Bill of exchange
3.Pay order
4.Gold
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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
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If no money is used to exchange goods it is called:
1.Barter
2.Currency
3.Black market
4.Free trade
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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
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In Pakistan money of account is:
1.Paisa
2.Rupee
3.Gold
4.Dollar
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In the equation MV = PY M represents:
1.Money supply
2.Money demand
3.Maximum output
4.Minimum output
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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
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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
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It can change money supply:
1.National Assembly
2.Supreme Court
3.Government
4.State Bank
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It is included in kinds of money:
1.Legal money
2.Credit money
3.Token money
4.All of the above
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Paper money in Pakistan is:
1.Convertible
2.Inconvertible
3.Linked to gold
4.None of the above
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The govt. can control inflation by:
1. Increasing demand for goods
2.Increasing supply of goods
3. Increasing money supply
4.Decreasing taxes
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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
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When value of money falls they benefit more:
1.Farmers
2.Industrialist
3.Lenders
4.Debtors
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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
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Which property paper money does NOT Possess
1.Acceptability
2.Divisibility
3.Durability
4.Portability
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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
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According to Keynes demand for money is affected by:
1. Income
2.Rate of interest
3.Literacy rate
4.Both (a) & (b)
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Accourding to Keynes motives for holding money are:
1.Two
2.Three
3.Four
4.Five
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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
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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
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Cash cannot be directly drawn from a bank against:
1.Cross cheque
2.Order cheque
3.Bearer cheque
4.Traveller cheque
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Cheque is:
1.Legal money
2.Credit money
3.Paper money
4.Not money
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Commercial banks create:
1.Credit money
2.Token money
3.Legal money
4.Do not create money
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Convertible money means:
1.It can buy goods
2.. Govt. can give gold against it
3.Illegal money
4.Low value money
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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)
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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
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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
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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
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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
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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
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It is the medium of exchange:
1.Black money
2.Near money
3.Currency
4.Foreign exchange
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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
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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
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Money material should be:
1.Abundant
2.Scarce
3.Beautiful
4.Heavy
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Paper money came into use:
1.100 years ago
2.200 years ago
3. 1000 years ago
4.2000 years ago
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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
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Quantity of money has relation with value of money:
1.Direct
2.Indirect
3.Inverse
4.No relation
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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
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Rupee is a coin:
1.Full value
2.Token money
3.Credit money
4.Convertible
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Ten-rupee note is:
1.Token money
2.Credit money
3.Legal money
4.(a) and (c) of above
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The equation of exchange PT = MV was given by:
1.Fisher
2.Crowther
3.Kuznet
4.Keynes
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The most important feature of money:
1.General acceptability
2.Convertibility into gold
3.Store of value
4.Medium of exchange
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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
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This is a characteristic of good money:
1. High intrinsic value
2.Liquidity
3.Attractive design
4.Easy to duplicate
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This is NOT money
1.Currency
2.Prize bond
3.Demand deposit in a bank
4.Coins
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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
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Under normal circumstances the velocity of circulation of money in a country is:
1.100%
2.Negative
3.Less than 10
4.Zero
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Value of money in Pakistan is determined by:
1.Govt. of Pakistan
2.State Bank
3.General price level
4.Value of doller
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What will promote savings?
1.Increase in credit facilities
2.Increase in taxation
3. Increase in personal incomes
4.Rising prices
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Which is money:
1.Check
2.Credit card
3.Currency
4.Prize bond
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Which is NOT a desirable characteristic of money?
1.Portable
2.Uniform
3.Easily recognised
4.Easily duplicated
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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
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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
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Which property the paper money does not possess:
1.Acceptability
2.Divisibility
3.Duability
4.Portability
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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
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