Money Banking and International Trade Test 3 Mcqs Preparation Online

1. A retail price index is a good measure of changes in?

A. Consumers' cost of living

B. General purchasing power of money

C. Patterns of consumer expenditure

D. Average standard of living

2. According to the classical approach, the demand for money primarily depends upon?

A. Economic transactions

B. Precautionary motive

C. Rate of interest

D. Speculative activity

3. The degree of elasticity in respect of speculative demand for money, under the liquidity trap conditions, is?

A. One

B. Zero

C. Infinite

D. Greater than one

4. The relationship between the market rate of interest and the market price of a bond is?

A. Direct

B. Positive and proportionate

C. Uncertain

D. Inverse

5. At a very low rate of interest, the interest-elasticity of the speculative demand for money becomes?

A. Very high

B. Infinite

C. Low

D. High

6. In which capacity does a person stand to gain from deflation?

A. As a pensioner

B. As an entrepreneur

C. As an equity-holder

D. As a debtor

7. Which of the following is not an instrument of monetary policy?

A. Credit rationing

B. Bank rate

C. Taxation

D. Open-market operations

8. Which of the following measures is helpful in controlling inflation?

A. Price control and rationing of essential goods

B. Reduction of government expenditure

C. All of the above

D. Raising the bank rate

9. The liquidity trap condition occurs at a?

A. Very high rate of interest

B. High rate of interest

C. Low rate of interest

D. Very low rate of interest

10. The cash transactions approach to the quantity theory of money is usually associated with the name of?

A. D.H.Robertson

B. Alfred Marshall

C. Irving Fisher

D. J.M.Keynes

Money Banking and International Trade Test 3 Mcqs Preparation Online

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