[OBJECTIVE]
Subject: Monetary Economics
Time Allowed: 15 Min
Total Marks: 10
NOTE: ATTEMPT THIS PAPER ON THIS QUESTION SHEET ONLY. Division of marks is given in front of each question. This Paper will be collected back after expiry of time limit mentioned above.
Part-I Encircle the correct option, each question carries equal marks. (10)
1. Which of the following is not a function of money?
a) hedge against inflation
b) medium of exchange
c) unit of account
d) store of value
2. An example of fiat money is
a) paper euros
b) gold
c) silver coins
d) cigarettes
3. If the banks in an economy operate with a reserve ratio of 20 per cent then the money multiplier is:
a) 4
b) 20
c) 25
d) 5
4. Reserve requirements that may be imposed on an economy’s banks by its central bank specify that banks’ reserves must be a minimum percentage of their
a) assets.
b) deposits.
c) loans.
d) government bonds.
5. The three main tools of monetary policy are
a) fiat, commodity, and deposit money.
b) open-market operations, reserve requirements, and the discount rate.
c) the money supply, government purchases, and taxation.
d) government expenditures, taxation, and reserve requirements.