Money and banking

Barter needs a:

• 1 Mobile wallet
• 2 Double coincidence of wants
• 3 Central bank
• 4 Credit card

Which of these is a function of money?

• 1 Collecting taxes
• 2 Medium of exchange
• 3 Making laws
• 4 Producing goods

Money that must be accepted by law in payment of debts is called:

• 1 Cheque
• 2 Barter
• 3 Credit
• 4 Legal tender

The central bank of Pakistan is the:

• 1 State Bank of Pakistan
• 2 Habib Bank
• 3 Federal Reserve
• 4 National Bank

The central bank acts as banker to:

• 1 Only exporters
• 2 Only the public
• 3 The government and the commercial banks
• 4 Only farmers

A rise in the policy rate usually makes borrowing:

• 1 Free
• 2 Cheaper
• 3 Impossible
• 4 More expensive

With a reserve ratio of 10 per cent, the credit multiplier is:

• 1 1
• 2 100
• 3 0.1
• 4 10

A new deposit of Rs. 1,000 with a reserve ratio of 20 per cent can support total deposits of up to:

• 1 Rs. 20,000
• 2 Rs. 1,200
• 3 Rs. 5,000
• 4 Rs. 2,000

In the equation MV = PT, the letter V stands for:

• 1 Volume of output
• 2 Value
• 3 Velocity of circulation
• 4 Variable cost

If M = 100, V = 4 and T = 200, the price level P is:

• 1 2
• 2 0.5
• 3 20
• 4 4

Raising the cash reserve requirement:

• 1 Prints money
• 2 Increases lending
• 3 Reduces the ability of banks to lend
• 4 Lowers prices directly

Which is NOT a function of a commercial bank?

• 1 Providing payments services
• 2 Accepting deposits
• 3 Giving loans
• 4 Issuing banknotes