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Question (1)

QN0038121

Which situation best illustrates the problem of double coincidence of wants?

(A) A person deposits money in a bank and earns interest
(B) A shoe manufacturer finds a farmer who wants shoes and has wheat to exchange
(C) A person buys goods using a debit card
(D) A borrower repays a bank loan through an instalment

Correct Answer: B

Explanation:

In barter, both parties must want what the other has. This is called double coincidence of wants.

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Question (2)

QN0038122

A farmer wants wheat while a shoe manufacturer wants wheat but the farmer does not need shoes. If money is introduced, what happens?

(A) Both must still exchange shoes for wheat
(B) The shoe manufacturer can sell shoes for money and use money to buy wheat
(C) The farmer must accept shoes
(D) The transaction becomes impossible

Correct Answer: B

Explanation:

Money acts as an intermediate medium of exchange and removes the need for double coincidence of wants.

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Question (3)

QN0038123

Why is the Indian rupee widely accepted as a medium of exchange?

(A) It is made of precious metal
(B) It has independent use as a commodity
(C) It is authorised by the government and legally accepted for payments
(D) It can be exchanged only through banks

Correct Answer: C

Explanation:

Modern currency is accepted because it is authorised by the government and legally accepted as a medium of payment.

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Question (4)

QN0038124

A person receives ₹60,000 as salary and keeps ₹10,000 as cash while depositing ₹50,000 in a bank. Which of the following correctly explains the deposit?

(A) It cannot be used for payments
(B) It is a demand deposit and can be withdrawn when required
(C) It is barter money
(D) It is collateral automatically

Correct Answer: B

Explanation:

Deposits that can be withdrawn on demand are called demand deposits.

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Question (5)

QN0038125

A customer writes a cheque of ₹18,000 to a supplier. The supplier deposits it into his bank account. What is the most appropriate effect?

(A) Both accounts increase by ₹18,000
(B) Customer's account decreases and supplier's account increases
(C) Customer's account increases and supplier's account decreases
(D) Both accounts decrease

Correct Answer: B

Explanation:

A cheque instructs the bank to transfer money from the payer's account to the payee's account.

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Question (6)

QN0038126

A bank receives deposits of ₹20 lakh and keeps 5% as cash with itself. How much cash does it retain?

(A) ₹50,000
(B) ₹1 lakh
(C) ₹2 lakh
(D) ₹5 lakh

Correct Answer: B

Explanation:

5% of ₹20 lakh = ₹1 lakh.

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Question (7)

QN0038127

If a bank receives total deposits of ₹40 lakh and follows the 5% cash provision mentioned in the chapter, how much would remain after keeping the cash provision?

(A) ₹2 lakh
(B) ₹20 lakh
(C) ₹38 lakh
(D) ₹42 lakh

Correct Answer: C

Explanation:

Cash provision = 5% of ₹40 lakh = ₹2 lakh. Remaining = ₹40 lakh − ₹2 lakh = ₹38 lakh.

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Question (8)

QN0038128

A bank pays 6% interest on deposits and charges 10% interest on loans. If ₹5 lakh is deposited and the entire amount is considered for this simple comparison, what is the annual difference between interest charged and interest paid?

(A) ₹10,000
(B) ₹15,000
(C) ₹20,000
(D) ₹30,000

Correct Answer: C

Explanation:

Difference in rates = 10% − 6% = 4%. 4% of ₹5 lakh = ₹20,000.

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Question (9)

QN0038129

Which statement best explains why banks are called intermediaries between depositors and borrowers?

(A) Banks only keep deposits safely
(B) Banks use deposits to provide loans to people needing funds
(C) Banks provide loans only from government funds
(D) Banks do not charge interest on loans

Correct Answer: B

Explanation:

Banks connect people with surplus funds to people who need funds.

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Question (10)

QN0038130

A bank receives ₹12 lakh in deposits. If it keeps 5% as cash and lends the remaining amount, what is the amount available for lending?

(A) ₹60,000
(B) ₹6 lakh
(C) ₹11.4 lakh
(D) ₹12.6 lakh

Correct Answer: C

Explanation:

Cash = 5% of ₹12 lakh = ₹60,000. Lending amount = ₹12,00,000 − ₹60,000 = ₹11,40,000.

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Question (1)

Which situation best illustrates the problem of double coincidence of wants?

Explanation:

Link:

Question (2)

A farmer wants wheat while a shoe manufacturer wants wheat but the farmer does not need shoes. If money is introduced, what happens?

Explanation:

Link:

Question (3)

Why is the Indian rupee widely accepted as a medium of exchange?

Explanation:

Link:

Question (4)

A person receives ₹60,000 as salary and keeps ₹10,000 as cash while depositing ₹50,000 in a bank. Which of the following correctly explains the deposit?

Explanation:

Link:

Question (5)

A customer writes a cheque of ₹18,000 to a supplier. The supplier deposits it into his bank account. What is the most appropriate effect?

Explanation:

Link:

Question (6)

A bank receives deposits of ₹20 lakh and keeps 5% as cash with itself. How much cash does it retain?

Explanation:

Link:

Question (7)

If a bank receives total deposits of ₹40 lakh and follows the 5% cash provision mentioned in the chapter, how much would remain after keeping the cash provision?

Explanation:

Link:

Question (8)

A bank pays 6% interest on deposits and charges 10% interest on loans. If ₹5 lakh is deposited and the entire amount is considered for this simple comparison, what is the annual difference between interest charged and interest paid?

Explanation:

Link:

Question (9)

Which statement best explains why banks are called intermediaries between depositors and borrowers?

Explanation:

Link:

Question (10)

A bank receives ₹12 lakh in deposits. If it keeps 5% as cash and lends the remaining amount, what is the amount available for lending?

Explanation:

Link:

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