Question # 1

Notes and coins are legal tender money because

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Government keeps gold and silver in their exchange

They are issued by the commercial banks

They are issued by the central bank

People are bound to accept them

Value of money means purchasing power of money. If quantity of money is doubled then

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Purchasing power of money will be one halved

Purchasing power of money will be doubled

Purchasing power of money will be tripled

There will be no effect on the purchasing power of money

Equation of relationship between quantity of money and value of money, MV=PT is presented by the economist

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Prof Taussing

Prof Fisher

Prof Crowther

Prof Marshall

This paper notes which can be converted into gold, silver or foreign exchange are called

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Standard money

Unlimited legal tender money

Convertible paper money

Inconvertible paper money

The money whose face value and intrinsic value are equal, is called

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Token money

Standard money

Paper money

Credit money

When there is deflation, then prices

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Increase

Decrease

Remain constant

do not change

One of the following is not the difficulty of the barter system

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Indivisibility of goods

Lack of common measure of value

Double coincidence of wants

Lack of store of value

Marginal revenue product is the amount of money attained by selling:

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Average product

Marginal product

Total product

Total cost

Relationship of value of money with quantity of money is

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Direct

Indirect

Inverse

Positive

According to quantity theory of money one halving the quantity of money prices

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Increase

Double

Decrease

One half

"What performs the functions of money, is money"
This definition of money is stated by

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Prof Walker

Prof Marshall

Prof Crowther

Prof Pigou

The money whose face value and intrinsic value are different

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Token money

Standard money

Legal money

Near money

One of the following is not the monetary measure to control inflation

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Increase in bank rate

Open market operation

Increase in the ratio of reserve capital of the banks

Increase in taxes

It was impossible under barter system

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Lack of coincidence of wants

Lack of common measure of value

Divisibility of some goods in small parts

Solution of all the said problems

Production of an additional unit of factor refers to:

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AP

TP

MP

MR

Saving deposits and time deposits of the banks, Govt. securities and shares of the companies are called

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Token money

Money of account

Standard money

Near money

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Principles of Economics Icom Part 1 English Medium Chapter 10 Online Test MCQs With Answers

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