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Economics Money and Value of Money
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1. Rupee is a coin:
Full value
Token money
Credit money
Convertible
2. Cash cannot be directly drawn from a bank against:
Cross cheque
Order cheque
Bearer cheque
Traveller cheque
3. Money material should be:
Abundant
Scarce
Beautiful
Heavy
4. In Pakistan money of account is:
Paisa
Rupee
Gold
Dollar
5. If no money is used to exchange goods it is called:
Barter
Currency
Black market
Free trade
6. Which is not the function of money:
Make demand and supply equal
Store of value
Medium of exchange
Measure of value
7. Which is money:
Check
Credit card
Currency
Prize bond
8. Convertible money means:
It can buy goods
. Govt. can give gold against it
Illegal money
Low value money
9. Barter has the defect:
Goods exchanged are of inferior quality
Goods cannot be exchanged for services
Lack of common measure of value
None of the above
10. Legal money is called so because:
The buyer must pay in that money
Can be converted into gold
Sellers do not accept any other money
It is official medium of exchange
11. It is the medium of exchange:
Black money
Near money
Currency
Foreign exchange
12. The govt. can control inflation by:
Increasing demand for goods
Increasing supply of goods
Increasing money supply
Decreasing taxes
13. Government of Pakistan issues currency on the basis of:
Availability of gold in the country
Availability of dollars in the country
Demand for money in the country
Tax collection
14. Quantity of money has relation with value of money:
Direct
Indirect
Inverse
No relation
15. Commercial banks create:
Credit money
Token money
Legal money
Do not create money
16. Cheque is:
Legal money
Credit money
Paper money
Not money
17. The most important feature of money:
General acceptability
Convertibility into gold
Store of value
Medium of exchange
18. It can change money supply:
National Assembly
Supreme Court
Government
State Bank
19. Which of the following increases money supply in the country?
Purchase of bonds by State Bank
Sale of bonds by State Bank
Increase in discount rate
Decrease in taxes
20. Paper money came into use:
100 years ago
200 years ago
1000 years ago
2000 years ago
21. Which property the paper money does not possess:
Acceptability
Divisibility
Duability
Portability
22. A saving account in a bank represents the function of money:
A measure of value
A medium of exchange
A standard for deferred payments
Store of value
23. A student records her income and spending for past month she uses the funtion of money
Medium of exchange
Standard of deferred payments
Store of value
Unit of account
24. It implements monetary policy of the country:
Central bank
Commercial banks
Specialised bank
Finance department
25. Which property paper money does NOT Possess
Acceptability
Divisibility
Durability
Portability
26. Anything used as money must be:
Fixed in value
Fixed in supply
Legal tender
Readily acceptable
27. What will promote savings?
Increase in credit facilities
Increase in taxation
Increase in personal incomes
Rising prices
28. Treasury Bill is a document used for:
A short-term loan to the exporter
A long-term loan to the government
A short-term loan to the government
A short-term loan to a govt. employee
29. Which does NOT represent a method of payment?
Cheque
Saving certificate
Currency note
Bill of exchange
30. Which is NOT a desirable characteristic of money?
Portable
Uniform
Easily recognised
Easily duplicated
31. Speculative demand for money depends upon:
Income
Investment
Rate of interest
Central bank
32. If money supply in a country decreases:
Prices will rise
Prices will fall
Rate of interest falls
(b) and (c) of above
33. In the equation MV = PY V represents:
Value of money
Velocity of circulation of money
Variation of nation income
All of the above
34. In the equation MV = PY M represents:
Money supply
Money demand
Maximum output
Minimum output
35. Accourding to Keynes motives for holding money are:
Two
Three
Four
Five
36. Quantity Theory of Money explains that:
Value of money depends upon quantity of money
Rate of interest depends upon quantity of money
Quantity of investment depends upon quantity of money
Supply of money depends upon quantity of money
37. Cross cheque has a cross sign (X) in the:
Right side upper corner
Right side lower corner
Left side upper corner
It does not have cross sign (X)
38. Cross cheque means:
It has been cancelled
Cash cannot be directly drawn from the bank
It has two lines drawn in left upper corner
(b) and (c) of above
39. It is true to say about kinds of inflation:
Demand pull and cost push inflation
Demand pull and cost push industry
Demand pull and income pull inflation
None of the above
40. Liquidity of a monetary asset means:
Velocity of circulation of money
Easy availability of oney
Ready acceptability of monetary asset
The monetary asset has lost it value
41. Barter means:
Trade through metallic money only
Trade of goods only excluding services
Trade of very low value goods
Trade without use of money
42. With reference to currency system of a country token money means:
Token tax
The money which has no purchasing power
The money which has higher face value
Advance payment to purchase something
43. Ten-rupee note is:
Token money
Credit money
Legal money
(a) and (c) of above
44. Paper money in Pakistan is:
Convertible
Inconvertible
Linked to gold
None of the above
45. Government securities:
Mean currency
Are near money
Are bought and sold on stock exchange market
(b) and (c) of above
46. Which is the characteristic of a good money:
Has good design
Has high value
Has a fixed value in gold
Is readily accepted by people
47. This is a characteristic of good money:
High intrinsic value
Liquidity
Attractive design
Easy to duplicate
48. It is a kind of money:
Credit money
Discredit money
Trust money
False money
49. This is NOT money
Currency
Prize bond
Demand deposit in a bank
Coins
50. Cross cheque:
Is issued only by a business firm
Is not accepted by banks
Ensures immediate payment of cash to the holder
None of the above
51. It is included in kinds of money:
Legal money
Credit money
Token money
All of the above
52. In payment of debt people can use this kind of money:
Legal money
Credit money
Real money
(a) and (b) of the above
53. Purchasing power of money during deflation is:
Reduced
Increased
Constant
Fluctuating
54. Velocity of circulation of money means the number of times a unit of money
Changes hands daily
Changes hands monthly
Changes hands annually
Changes purchasing power
55. The equation of exchange PT = MV was given by:
Fisher
Crowther
Kuznet
Keynes
56. Value of money in Pakistan is determined by:
Govt. of Pakistan
State Bank
General price level
Value of doller
57. When value of money falls they benefit more:
Farmers
Industrialist
Lenders
Debtors
58. Which one is equation of exchange?
PT = MV
PV = MT
PM = TV
None of these
59. Inflation can be controlled by applying:
Monetary and fiscal policies
Monetary and labour policy
Fiscal and commercial policies
All of the above
60. Inflation is a situation when :
Prices of some goods rise
General price level rises continuously
Prices double every year
Prices rise and fall
61. Under normal circumstances the velocity of circulation of money in a country is:
100%
Negative
Less than 10
Zero
62. In Pakistan in the year 2007-08 money supply was about
Rs. 3400 million
Rs. 3400 billion
Rs. 3400 trillion
Uncountable
63. Banks discount it and advance loans:
Draft
Bill of exchange
Pay order
Gold
64. Paper money is called fiat money because
It is issued with authority of government
It is convertible into gold
It can be easily printed
It is light weight
65. According to Keynes demand for money is affected by:
Income
Rate of interest
Literacy rate
Both (a) & (b)
66. During inflation:
Lenders lose borrowers gain
Borrowers lose lenders gain
Borrowers and lenders both lose
All sections of the society gain
67. The quantity demanded of money rises:
As the interest rises
As the interest rate falls
As the supply of money falls
As the number of banks rises
68. Which people are most likely to gain during inflation?
Those living on pension
Those living on their savings
Those who are repaying borrowed money
Those who have lent money
69. If quantity of money increases 100% other things remaining constant value of money changes by:
Increases by 100%
Decreases by 100%
Decreases by 200%
Does not change
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