new horizon scholars school

Kavesar, Ghodbunder Road, Thane (W)-400615

CBSE Affiliation No: 1130470
Grade: XII Sub: - Economics practice paper (030)

Name: _________________________ Date: 20/4/2022

Roll No: _____________ Div.: _______Assignment 2 chapter: Money and Banking

Q1) Read the following statement: Assertion (a) and reason (R). Choose one of the correct alternative given
below

1) Assertion (A) Net demand Deposits are included in money supply

Reason(R): Interbank deposits are the deposits held by the banks on behalf of other banks and do not belong to the
public

Alternatives

a) Both assertion (A) and Reason(R) are true and reason(R) is the correct explanation of Assertion(A)
b) Both Assertion (A) and Reason(R) are true and Reason(R) is not the correct explanation of Assertion (A)
c) Both assertion (A) and Reason(R) are false
d) Assertion (A) is false but Reason(R) is true

2) Assertion (A) Demand deposit is a Non legal tender money or optional money

Reason(R) Depositors are given cheque facility to withdraw money from their account or make payment in case of
demand deposits

Alternatives

a) Both assertion (A) and Reason(R) are true and reason(R) is the correct explanation of Assertion(A)
b) Both Assertion (A) and Reason(R) are true and Reason(R) is not the correct explanation of Ass ertion (A)

c) Both assertion (A) and Reason(R) are false

d) Assertion (A) is false but Reason(R) is true

3) Assertion (A): In India no one can refuse to accept payments made in currency

Reason(R): currency notes are unlimited legal tender in India

 a) Both assertion (A) and Reason(R) are true and reason(R) is the correct explanation of Assertion(A)
b) Both Assertion (A) and Reason(R) are true and Reason(R) is not the correct explanation of A ssertion (A)
c) Both assertion (A) and Reason(R) are false
d) Assertion (A) is false but Reason(R) is true

Q2) multiple choice Question

1) What items are not included in M1 measure of supply

a) Currency and coins with public
b) Interbank deposits
c) Other deposits with RBI
d) Net demand deposit
2) Demand deposit with Commercial Banks are part of:
a) Money supply
b) High powered money
c) Both a and b
d) Neither (a) nor (b)

3) Who regulates money supply

a) Government of India
b) Reserve Bank of India
c) Commercial bank
d) Planning commission

4) In India money creating sector are

a) Banking system
b) Government of the country
c) Both (a) and (b)
d) None of these

Q3) Short answer type Question

a. Explain the concept of money supply

b. Define money supply and its components
c. Who are the suppliers of money supply in India
d. What are the demand deposits