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Vidaara.orgClass 11 · Mathematics
CodeVID-M11-WS
Money and Banking — Practice Worksheet
Chapter: Money and Banking
Topic: Money and Banking
Maximum Marks: 35
Time: 30 minutes
Name: ____________________ Roll No.: __________ Date: ____________

General Instructions

  • All questions are compulsory.
  • Choose the correct option (A, B, C or D) for each question.
  • The answer key is at the end — try the paper first!
Section A — Multiple Choice (1 mark each) 15 × 1 = 15 marks
1.
Direct exchange of goods for goods is the:
  • A.Money system
  • B.Barter system
  • C.Banking system
  • D.Credit system
2.
A major problem of barter was the lack of a:
  • A.Double coincidence of wants
  • B.Government
  • C.Market
  • D.Producer
3.
Anything generally accepted as a medium of exchange is:
  • A.Money
  • B.A tax
  • C.A subsidy
  • D.A loan
4.
The primary function of money is as a:
  • A.Store of value
  • B.Medium of exchange
  • C.Measure of value
  • D.Deferred payment
5.
Expressing the value of every good in money is the ____ function.
  • A.Medium of exchange
  • B.Measure of value
  • C.Store of value
  • D.Deferred payment
6.
Saving money for future use shows the ____ function.
  • A.Store of value
  • B.Medium of exchange
  • C.Measure of value
  • D.Standard of payment
7.
A commercial bank's two primary functions are accepting deposits and:
  • A.Advancing loans
  • B.Issuing currency
  • C.Collecting taxes
  • D.Printing notes
8.
A deposit kept for a fixed period at higher interest is a:
  • A.Current account
  • B.Savings account
  • C.Fixed (time) deposit
  • D.Loan
9.
A bank's profit comes from the difference between interest on loans and interest on:
  • A.Deposits
  • B.Taxes
  • C.Currency
  • D.Reserves only
10.
Banks can create credit because they keep only a ____ of deposits as reserve.
  • A.Full amount
  • B.Small fraction
  • C.Zero
  • D.Double amount
11.
The apex institution controlling the banking system is the:
  • A.Commercial bank
  • B.Central bank
  • C.Cooperative bank
  • D.Post office
12.
The central bank of India is the:
  • A.SBI
  • B.RBI
  • C.World Bank
  • D.IMF
13.
The sole right to issue currency notes belongs to the:
  • A.Commercial banks
  • B.Central bank
  • C.Government clerks
  • D.Public
14.
When the central bank lends to banks in a crisis, it acts as the:
  • A.Lender of last resort
  • B.Bank of issue
  • C.Tax collector
  • D.Borrower
15.
Which is a tool the central bank uses to control credit?
  • A.Cash reserve ratio (CRR)
  • B.Advertising
  • C.Sales tax
  • D.Product design
Section B — Challenge / Olympiad (2 marks each) 10 × 2 = 20 marks
16.
A farmer with rice wants cloth, but the weaver wants wheat, not rice. In a barter economy they cannot trade because there is no:
  • A.Double coincidence of wants
  • B.Bank
  • C.Tax
  • D.Central bank
17.
If a bank keeps 20% of deposits as reserve and lends the rest, the banking system can create total credit that is ____ the initial cash.
  • A.A multiple of (more than)
  • B.Less than
  • C.Equal to
  • D.Zero times
18.
To fight high inflation, the central bank may raise the repo rate, which tends to make borrowing:
  • A.Costlier, reducing credit and spending
  • B.Cheaper, raising spending
  • C.Free
  • D.Impossible forever
19.
Unlike a commercial bank, the central bank does NOT primarily aim at:
  • A.Profit
  • B.Issuing currency
  • C.Controlling credit
  • D.Supervising banks
20.
During a banking panic, the central bank's role as 'lender of last resort' is vital because it:
  • A.Prevents the collapse of banks that cannot get funds elsewhere
  • B.Closes all banks
  • C.Prints unlimited notes for the public
  • D.Collects taxes
21.
Money's function as a 'standard of deferred payments' is what makes ____ possible.
  • A.Borrowing and lending (loans repaid in future)
  • B.Barter
  • C.Hoarding goods
  • D.Double coincidence of wants
22.
A bank reduces its cash reserve ratio. Other things equal, its ability to create credit will:
  • A.Increase
  • B.Decrease
  • C.Stay the same
  • D.Fall to zero
23.
Keeping the government's accounts and managing its receipts and payments is the central bank acting as:
  • A.Banker to the government
  • B.Bank of issue
  • C.A commercial bank
  • D.A taxpayer
24.
Currency notes in India are uniform and trustworthy largely because they are issued only by the:
  • A.Central bank (RBI)
  • B.Many commercial banks
  • C.State governments
  • D.Private firms
25.
Why are money, commercial banks and the central bank studied together?
  • A.Together they form the monetary and banking system that runs the economy's money
  • B.They are unrelated
  • C.Only banks matter
  • D.Money has no role

Answer Key

Section A — Multiple Choice (1 mark each)
  1. (B) Barter system
  2. (A) Double coincidence of wants
  3. (A) Money
  4. (B) Medium of exchange
  5. (B) Measure of value
  6. (A) Store of value
  7. (A) Advancing loans
  8. (C) Fixed (time) deposit
  9. (A) Deposits
  10. (B) Small fraction
  11. (B) Central bank
  12. (B) RBI
  13. (B) Central bank
  14. (A) Lender of last resort
  15. (A) Cash reserve ratio (CRR)
Section B — Challenge / Olympiad (2 marks each)
  1. (A) Double coincidence of wants
  2. (A) A multiple of (more than)
  3. (A) Costlier, reducing credit and spending
  4. (A) Profit
  5. (A) Prevents the collapse of banks that cannot get funds elsewhere
  6. (A) Borrowing and lending (loans repaid in future)
  7. (A) Increase
  8. (A) Banker to the government
  9. (A) Central bank (RBI)
  10. (A) Together they form the monetary and banking system that runs the economy's money
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