Money Part 2 - Classification, Functions, Demand and Supply: Macroeconomics Online Test

A rise in the Interest rates implies: I A fall in the Transactions Demand in the economy II A rise in the cost of credit III A rise in the Speculative Demand for Money
I only
II only
III only
I and II
II and III
The concept of Velocity of Money was introduced by:
Alfred Marshall and Irving Fisher
Irving Fisher and Keynes
Tobin and Keynes
Tobin and Friedman
The Velocity of Money is: I the speed at which money is changing hands II the ratio of Demand for Money to Supply of Money III the number of times money is circulated in the economy
I only
II only
III only
I and II
I and III
Money Supply is the stock of Money with the: I Public II Banking system III Government
I only
II only
III only
I and II
I, II and III
Who revived, altered and empirically tested the Quantity Theory of Money?
J.M. Keynes
Milton Friedman
H.G. Johns
What is the name of the point beyond which an increase in the quantity of Money will not lower the Interest Rate?
Marginal Efficiency of capital
Liquidity Trap
Rate of Interest
Real-cost Doctrine
If an increased preference for cash by the public, is accompanied by an increase in the Cash Reserve, the net effect is:
An increase in the Money Supply
A decrease in the Money Supply
An increase in the Money Demand
A decrease in the Money Demand
A increase in the Rate of Interest
High powered Money includes:
Demand and Time Deposit Liabilities
Demand Deposits
All Liabilities of Commercial Banks
Currency, Reserves and other obligations of the Central Bank
The term ‘Active Balances’ given by Keynes refers to the money held for: I the Transactions Motive II the Speculative Motive III the Precautionary Motive
I only
II only
III only
I and II
I and III
Out of the given options, which of the following is not a key determinant of Demand for Money? I Precautionary Demand for Money II Total Wealth III Expected Rates of Return on Money and other Assets
I only
II only
III only
I and II
I and III

Money and its role can not be underestimated in the study of Economics. In an economy, Money performs multiple functions, be it Primary, Secondary or Contingent. Here is a 7-minute short Multiple Choice questions test relating to Money, its classification, functions, Supply of Money, and other related concepts. While taking this test, go through all the options very carefully and then, mark your answers.

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