McqMate
Chapters
| 1. |
Speculative demand for money depends upon: |
| A. | Income |
| B. | Investment |
| C. | Rate of interest |
| D. | Central bank |
| Answer» C. Rate of interest | |
| 2. |
If money supply in a country decrease: |
| A. | Prices will rise |
| B. | Prices will fall |
| C. | Rate of interest falls |
| D. | (b) and (c) of above |
| Answer» B. Prices will fall | |
| 3. |
In the equation MV = PY, V represents: |
| A. | Value of money |
| B. | Velocity of circulation of money |
| C. | Variation of nation income |
| D. | All of the above |
| Answer» B. Velocity of circulation of money | |
| 4. |
In the equation MV = PY, M represents: |
| A. | Money supply |
| B. | Money demand |
| C. | Maximum output |
| D. | Minimum output |
| Answer» A. Money supply | |
| 5. |
According to Keynes, motives for holding money are: |
| A. | Two |
| B. | Three |
| C. | Four |
| D. | Five |
| Answer» B. Three | |
| 6. |
Quantity Theory of Money explains that: |
| A. | Value of money depends upon quantity of money |
| B. | Rate of interest depends upon quantity of money |
| C. | Quantity of investment depends upon quantity of money |
| D. | Supply of money depends upon quantity of money |
| Answer» A. Value of money depends upon quantity of money | |
| 7. |
Cross cheque has a cross sign (X) in the: |
| A. | Right side upper corner |
| B. | Right side lower corner |
| C. | Left side upper corner |
| D. | It does not have cross sign (X) |
| Answer» D. It does not have cross sign (X) | |
| 8. |
Cross cheque means: |
| A. | It has been cancelled |
| B. | Cash cannot be directly drawn from the bank |
| C. | It has two lines drawn in left upper corner |
| D. | (b) and (c) of above |
| Answer» D. (b) and (c) of above | |
| 9. |
Purchasing power of money during deflation is: |
| A. | Reduced |
| B. | Increased |
| C. | Constant |
| D. | Fluctuating |
| Answer» B. Increased | |
| 10. |
Velocity of circulation of money means the number of times a unit of money |
| A. | Changes hands daily |
| B. | Changes hands monthly |
| C. | Changes hands annually |
| D. | Changes purchasing power |
| Answer» C. Changes hands annually | |
| 11. |
The equation of exchange PT = MV was given by: |
| A. | Fisher |
| B. | Crowther |
| C. | Kuznets |
| D. | Keynes |
| Answer» A. Fisher | |
| 12. |
When value of money falls, they benefit more: |
| A. | Farmers |
| B. | Industrialist |
| C. | Lenders |
| D. | Debtors |
| Answer» D. Debtors | |
| 13. |
When the nation's money supply is Rs. 1200 billion and GDP is Rs. 4800 billion, velocity of circulation money is: |
| A. | 0.25 |
| B. | 4 |
| C. | 0.4 |
| D. | 4 billion rupees |
| Answer» B. 4 | |
| 14. |
Which one is equation of exchange? |
| A. | PT = MV |
| B. | PV = MT |
| C. | PM = TV |
| D. | None of these |
| Answer» A. PT = MV | |
| 15. |
Inflation can be controlled by applying: |
| A. | Monetary and fiscal policies |
| B. | Monetary and Labour policy |
| C. | Fiscal and commercial policies |
| D. | All of the above |
| Answer» A. Monetary and fiscal policies | |
| 16. |
Inflation is a situation when: |
| A. | Prices of some goods rise |
| B. | General price level rises continuously |
| C. | Prices double every year |
| D. | Prices rise and fall |
| Answer» B. General price level rises continuously | |
| 17. |
Under normal circumstances, the velocity of circulation of money in a country is: |
| A. | 100% |
| B. | Negative |
| C. | Less than 10 |
| D. | Zero |
| Answer» C. Less than 10 | |
| 18. |
According to Keynes, demand for money is affected by: |
| A. | Income |
| B. | Rate of interest |
| C. | Literacy rate |
| D. | Both (a) & (b) |
| Answer» D. Both (a) & (b) | |
| 19. |
During inflation: |
| A. | Lenders lose, borrowers gain |
| B. | Borrowers lose, lenders gain |
| C. | Borrowers and lenders both lose |
| D. | All sections of the society gain |
| Answer» A. Lenders lose, borrowers gain | |
| 20. |
The quantity demanded of money rises: |
| A. | As the interest rises |
| B. | As the interest rate falls |
| C. | As the supply of money falls |
| D. | As the number of banks rises |
| Answer» B. As the interest rate falls | |
| 21. |
Which people are most likely to gain during inflation? |
| A. | Those living on pension |
| B. | Those living on their savings |
| C. | Those who are repaying borrowed money |
| D. | Those who have lent money |
| Answer» C. Those who are repaying borrowed money | |
| 22. |
If quantity of money increases 100%, other things remaining constant, value of money changes by: |
| A. | Increases by 100% |
| B. | Decreases by 100% |
| C. | Decreases by 200% |
| D. | Does not change |
| Answer» B. Decreases by 100% | |
| 23. |
For the economy, prices are beneficial: |
| A. | Falling slowly |
| B. | Rising slowly |
| C. | Rising fast |
| D. | Falling fast |
| Answer» B. Rising slowly | |
| 24. |
Value of money means: |
| A. | Gold purchased by money |
| B. | General purchasing power of money |
| C. | Importance of money |
| D. | Demand for money |
| Answer» B. General purchasing power of money | |
| 25. |
Value of money and supply of money are related: |
| A. | Inversely |
| B. | Directly |
| C. | Govt. law |
| D. | Are not related |
| Answer» A. Inversely | |
| 26. |
They are not affected badly by rising prices: |
| A. | Salaried persons |
| B. | Businessmen |
| C. | Debtors |
| D. | Importers |
| Answer» B. Businessmen | |
| 27. |
Inflation: |
| A. | Makes distribution of income equal |
| B. | Makes distribution of income unequal |
| C. | Has no effect on distribution of income |
| D. | Affects only industrial sector |
| Answer» B. Makes distribution of income unequal | |
| 28. |
It is assumption of quantity theory of money: |
| A. | Quantity of traded goods increases |
| B. | Velocity of circulation of money constant |
| C. | Govt. imposes new taxes |
| D. | (a) and (b) of the above |
| Answer» B. Velocity of circulation of money constant | |
| 29. |
If we put this letter in the blank space, we get quantity theory of money PY = M |
| A. | S |
| B. | T |
| C. | V |
| D. | A |
| Answer» C. V | |
| 30. |
In the equation PY = MV showing quantity theory of money. Y represents: |
| A. | Year of measurement of national income |
| B. | National income |
| C. | Tax revenue of the govt |
| D. | (a) and (c) of above |
| Answer» B. National income | |
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