Money is best defined as anything that
A Is issued by the government
B Has intrinsic value
C Is generally accepted as a medium of exchange
D Is used only for saving
Money is defined by its acceptability as a medium of exchange in transactions.
The primary function of money is to act as
A Store of value
B Medium of exchange
C Standard of deferred payment
D Measure of utility
Money facilitates exchange by eliminating the barter system.
Which function of money overcomes the problem of double coincidence of wants?
A Store of value
B Measure of value
C Medium of exchange
D Standard of deferred payment
As a medium of exchange, money removes the need for mutual wants.
Money as a measure of value means it
A Stores wealth
B Measures purchasing power
C Serves as unit of account
D Pays interest
Money provides a common unit to measure value of goods and services.
The function of money which allows saving for future use is
A Medium of exchange
B Measure of value
C Store of value
D Standard of price
Money preserves purchasing power over time.
Money acts as a standard of deferred payment when it is used for
A Immediate exchange
B Future payments like loans
C Measuring prices
D Storing wealth only
Deferred payments involve settling obligations in future using money.
Which of the following is NOT a function of money?
A Medium of exchange
B Store of value
C Measure of value
D Measure of utility
Utility is subjective and cannot be measured in money terms.
Fiat money refers to money which
A Has intrinsic value
B Is backed by gold
C Is declared legal tender by government
D Is issued by banks only
Fiat money has value by government order, not by intrinsic worth.
Legal tender money means money which
A Is used internationally
B Is accepted by law for settling debts
C Has commodity value
D Is used only by banks
Legal tender must be accepted as payment of debt.
Currency notes and coins are examples of
A Credit money
B Commodity money
C Fiat money
D Optional money
Notes and coins have no intrinsic value but legal acceptance.
Which of the following is commodity money?
A Currency note
B Gold coin
C Bank deposit
D Cheque
Commodity money has intrinsic value like gold or silver.
Credit money mainly consists of
A Currency notes
B Coins
C Cheques and bank deposits
D Gold and silver
Credit money represents claims on banks.
Cheques are regarded as money because they
A Are legal tender
B Can be directly used for purchases
C Are acceptable means of payment
D Have intrinsic value
Cheques facilitate transfer of bank deposits for payment.
Which form of money has the highest liquidity?
A Fixed deposit
B Savings deposit
C Currency
D Bonds
Currency can be used immediately for transactions.
Narrow money (M1) includes
A Currency + demand deposits
B Currency + time deposits
C Currency + savings deposits
D Currency + bonds
M1 is the most liquid measure of money supply.
Broad money includes
A Only currency
B Only demand deposits
C Demand and time deposits
D Gold reserves
Broad money covers less liquid forms like time deposits.
Which of the following is NOT included in money supply?
A Currency with public
B Demand deposits
C Time deposits
D Shares and debentures
Shares are financial assets, not money.
Money supply refers to
A Total wealth of economy
B Stock of money at a point of time
C Flow of income
D Government revenue
Money supply is a stock variable.
Which institution has authority to issue currency in India?
A Commercial banks
B Ministry of Finance
C Reserve Bank of India
D SEBI
RBI has monopoly of note issue.
High-powered money is also known as
A Narrow money
B Broad money
C Reserve money
D Credit money
High-powered money consists of currency and bank reserves.
Which component of money supply is created by RBI?
A Demand deposits
B Credit money
C Currency notes
D Time deposits
RBI issues currency notes.
Which form of money is also known as bank money?
A Currency
B Credit money
C Commodity money
D Fiat money
Bank deposits are called credit money.
Money facilitates specialization and division of labour because
A It increases prices
B It removes barter system
C It increases savings
D It increases production cost
Easy exchange encourages specialization.
Which of the following is a drawback of barter system?
A Excess liquidity
B Inflation
C Lack of double coincidence of wants
D Price instability
Barter requires matching wants between two parties.
The value of money refers to its
A Face value
B Intrinsic value
C Purchasing power
D Exchange rate
Value of money is measured by what it can buy.
Inflation reduces the value of money because
A Prices fall
B Purchasing power declines
C Output increases
D Money supply decreases
Rising prices reduce purchasing power of money.
Money as a store of value is affected negatively by
A Stable prices
B Deflation
C Inflation
D Economic growth
Inflation erodes the real value of money.
Which of the following is optional money?
A Currency notes
B Coins
C Cheques
D RBI notes
Acceptance of cheques is optional, not compulsory.
Token money refers to money whose face value is
A Equal to intrinsic value
B Less than intrinsic value
C More than intrinsic value
D Zero
Coins have face value higher than metal value.
Full-bodied money is money whose
A Face value is less than intrinsic value
B Face value equals intrinsic value
C Face value exceeds intrinsic value
D Has no intrinsic value
Commodity money has equal face and intrinsic value.
Which of the following best explains money as a unit of account?
A It facilitates saving
B It helps in deferred payments
C It expresses prices in common terms
D It increases production
Unit of account allows comparison of values.
The role of money in modern economy includes
A Encouraging savings and investment
B Promoting barter
C Reducing trade
D Eliminating banks
Money mobilizes savings and facilitates investment.
Which function of money is most affected during hyperinflation?
A Medium of exchange
B Store of value
C Measure of value
D Standard of deferred payment
Hyperinflation destroys money’s value for saving.
Which of the following is NOT included in M1?
A Currency
B Demand deposits
C Time deposits
D RBI deposits of banks
Time deposits are part of broad money, not M1.
Money supply in India is published by
A Ministry of Finance
B RBI
C NITI Aayog
D SEBI
RBI publishes monetary aggregates.
Money is called “liquid” because it
A Earns interest
B Can be easily converted into goods
C Is issued by banks
D Is legally backed
Liquidity refers to ease of exchange.
Which form of money is least liquid?
A Currency
B Demand deposit
C Fixed deposit
D Savings deposit
Fixed deposits require maturity or penalty for withdrawal.
Demand deposits are called money because they
A Earn high interest
B Are accepted for payments
C Have intrinsic value
D Are legal tender
They can be transferred through cheques.
Money supply does NOT include
A Coins with public
B Notes with public
C Cash reserves with banks
D Gold with RBI
Gold reserves are not part of money supply.
Money supply is considered a stock variable because it
A Changes daily
B Is measured at a point of time
C Measures flow of income
D Depends on production
Stock variables are measured at a specific time.
Which function of money links present with future?
A Medium of exchange
B Measure of value
C Store of value
D Standard of deferred payment
Deferred payments involve future obligations.
Modern money is largely
A Commodity money
B Paper money only
C Credit money
D Gold-backed money
Bank deposits form major part of money supply.
Which statement is correct?
A All money is legal tender
B All legal tender is money
C All money is optional
D All money has intrinsic value
Legal tender must be accepted as money.
Which factor increases demand for money?
A Fall in prices
B Increase in income
C Decrease in transactions
D Fall in interest rate
Higher income leads to more transactions.
Money is neutral when
A It affects output
B It affects prices only
C It affects real variables
D It affects employment
Neutrality of money implies it affects only nominal variables.
According to classical economists, money is
A Non-neutral
B Neutral in long run
C Neutral in short run only
D Always active
Classical view holds money affects prices, not real output in long run.
Which function of money is basis of credit system?
A Medium of exchange
B Measure of value
C Store of value
D Standard of deferred payment
Credit transactions depend on deferred payments.
The role of money in economic development includes
A Promoting savings
B Mobilizing resources
C Facilitating investment
D All of the above
Money supports growth through savings-investment channel.
Which of the following is NOT a component of high-powered money?
A Currency with public
B Cash reserves of banks
C Demand deposits
D Currency with banks
Demand deposits are created by banks, not RBI.
The most important characteristic of money is its
A Stability of value
B Intrinsic value
C Acceptability
D Durability
General acceptability defines money.