CUET Economics - Macro - Money & Banking | Free Questions

Q1:

2026: 23 May Shift 1

Macro

>

Money & Banking

Easy

Suppose the initial deposits are Rs.1000 cr and the Statuary Liquidity Ratio is 20%. How much loan the bank can give from the given initial deposits?

Rs. 800

Rs. 500

Rs. 200

Rs. 400

Correct Answer

Option 1

Correct Answer

Explanation

Q2:

2026: 23 May Shift 1

Macro

>

Money & Banking

Easy

Identify the liabilities of the commercial banks from the following:

Deposits held with commercial banks

Government securities held by bank

Cash reserve ratio with RBI

SLR with commercial banks

Correct Answer

Option 1

Correct Answer

Explanation

Q3:

2026: 23 May Shift 1

Macro

>

Money & Banking

Medium

Select the option which correctly describe the feature of Reverse Repurchase Agreement.

It is the rate at which RBI provides long term loans to commercial banks.

Purchase of securities through an agreement.

Sale of securities through an agreement.

Purchase of securities in open market.

Correct Answer

Option 3

Correct Answer

Explanation

Q4:

2026: 23 May Shift 1

Macro

>

Money & Banking

Easy

Which of the following are the functions of money?

A. Intermediary between the buyer and the seller.

B. Expressing goods in monetary units.

C. Helps in deferred payments.

D. Helps in making a cashless society.

Choose the correct answer from the options given below:

A, B and D only

A, B and C only

A, C and D only

B, C and D only

Correct Answer

Option 2

Correct Answer

Explanation

Q5:

2026: 21 May Shift 1

Macro

>

Money & Banking

Easy

Which of the following options correctly explains the functions of money?

(A) Medium of exchange

(B) Measure of account

(C) Store of value

(D) Quality measuring standard

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A), (B) and (C) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 2

Correct Answer

Explanation

Q6:

2026: 21 May Shift 1

Macro

>

Money & Banking

Easy

Match List-I with List-II

List-I	List-II
(A) Lender of last resort	(I) 1/Cash reserve ratio
(B) Money multiplier	(II) Buying and selling government securities
(C) Open market operations	(III) RBI
(D) $M^d_t$ = kPY	(IV) Transaction demand for money is positively related to the real income of an economy.

Choose the correct answer from the options given below:

(A) - (I), (B) - (II), (C) - (III), (D) - (IV)

(A) - (III), (B) - (I), (C) - (II), (D) - (IV)

(A) - (I), (B) - (III), (C) - (IV), (D) - (II)

(A) - (III), (B) - (II), (C) - (I), (D) - (IV)

Correct Answer

Option 2

Correct Answer

Explanation

Q7:

2026: 21 May Shift 1

Macro

>

Money & Banking

Medium

Which of the following are correct about money measures?

(A) M1 = CU + DD

(B) M2 = M1 + Savings deposits with commercial banks

(C) M3 = M1 + Net time deposits of commercial banks

(D) M4 = M3 + Total deposits with Post Office savings organisations (excluding National Savings Certificates)

Choose the correct answer from the options given below:

(A), (C) and (D) only

(A), (B) and (D) only

(A), (B), (C) and (D)

(B), (C) and (D) only

Correct Answer

Option 1

Correct Answer

Explanation

Q8:

2026: 21 May Shift 1

Macro

>

Money & Banking

Easy

Which of the following are the correct combinations of monetary instruments of RBI to regulate money supply in the economy?

(A) Bank rate

(B) Cash reserve ratio

(C) Savings bank interest rate for public

(D) Repo rate

Choose the correct answer from the options given below:

(A), (C) and (D) only

(C), (B) and (D) only

(A), (B), (C) and (D)

(A), (B) and (D) only

Correct Answer

Option 4

Correct Answer

Explanation

Q9:

2026: 6 June Shift 1

Macro

>

Money & Banking

Easy

Money

Reserve Bank is the only institution which can issue currency. When commercial banks need more funds in order to be able to create more credit, they may go to market for such funds or go to the Central Bank. Central bank provides them funds through various instruments. This role of RBI, that of being ready to lend to banks at all times is another important function of the central bank, and due to this central bank is said to be the lender of last resort. The RBI controls the money supply in the economy in various ways. The tools used by the Central bank to control money supply can be quantitative or qualitative. Quantitative tools, control the extent of money supply by changing the CRR, or bank rate or open market operations. Qualitative tools include persuasion by the Central bank in order to make commercial banks discourage or encourage lending which is done through moral suasion, margin requirement, etc.

Open Market Operations refers to buying and selling of bonds issued by the government in the open market. This purchase and sale is entrusted to the Central bank on behalf of the government. there is another type of operation in which when the central bank buys the security, this agreement of purchase also has specification about date and price of resale of this security. This type of agreement is called a repurchase agreement. The interest rate at which the money is lent in this way is called the repo rate. Similarly, instead of outright sale of securities the central bank may sell the securities through an agreement which has a specification about the date and price at which it will be repurchased. This type of agreement is called a reverse repurchase agreement.

Which of the following is the quantitative tool of money supply used by Central Bank?

Moral Suasion.

Margin Requirement.

Cash Reserve Ratio.

Letter of Credit.

Correct Answer

Option 3

Correct Answer

Explanation

Q10:

2026: 6 June Shift 1

Macro

>

Money & Banking

Easy

Money

Reserve Bank is the only institution which can issue currency. When commercial banks need more funds in order to be able to create more credit, they may go to market for such funds or go to the Central Bank. Central bank provides them funds through various instruments. This role of RBI, that of being ready to lend to banks at all times is another important function of the central bank, and due to this central bank is said to be the lender of last resort. The RBI controls the money supply in the economy in various ways. The tools used by the Central bank to control money supply can be quantitative or qualitative. Quantitative tools, control the extent of money supply by changing the CRR, or bank rate or open market operations. Qualitative tools include persuasion by the Central bank in order to make commercial banks discourage or encourage lending which is done through moral suasion, margin requirement, etc.

Open Market Operations refers to buying and selling of bonds issued by the government in the open market. This purchase and sale is entrusted to the Central bank on behalf of the government. there is another type of operation in which when the central bank buys the security, this agreement of purchase also has specification about date and price of resale of this security. This type of agreement is called a repurchase agreement. The interest rate at which the money is lent in this way is called the repo rate. Similarly, instead of outright sale of securities the central bank may sell the securities through an agreement which has a specification about the date and price at which it will be repurchased. This type of agreement is called a reverse repurchase agreement.

In open market operation if Central Bank is buying government securities, how this will impact the money supply in the market?

Decrease.

Remain constatnt.

May increase or decrease.

Increase.

Correct Answer

Option 4

Correct Answer

Explanation

Q11:

2026: 6 June Shift 1

Macro

>

Money & Banking

Easy

Money

Reserve Bank is the only institution which can issue currency. When commercial banks need more funds in order to be able to create more credit, they may go to market for such funds or go to the Central Bank. Central bank provides them funds through various instruments. This role of RBI, that of being ready to lend to banks at all times is another important function of the central bank, and due to this central bank is said to be the lender of last resort. The RBI controls the money supply in the economy in various ways. The tools used by the Central bank to control money supply can be quantitative or qualitative. Quantitative tools, control the extent of money supply by changing the CRR, or bank rate or open market operations. Qualitative tools include persuasion by the Central bank in order to make commercial banks discourage or encourage lending which is done through moral suasion, margin requirement, etc.

Open Market Operations refers to buying and selling of bonds issued by the government in the open market. This purchase and sale is entrusted to the Central bank on behalf of the government. there is another type of operation in which when the central bank buys the security, this agreement of purchase also has specification about date and price of resale of this security. This type of agreement is called a repurchase agreement. The interest rate at which the money is lent in this way is called the repo rate. Similarly, instead of outright sale of securities the central bank may sell the securities through an agreement which has a specification about the date and price at which it will be repurchased. This type of agreement is called a reverse repurchase agreement.

To discourage the lending by commercial bank which of the following tool can be used by Central Bank?

Decrease Bank rate.

Increase Margin requirement.

Buy Government securities.

Decrease Statutory Liquidity Ratio.

Correct Answer

Option 2

Correct Answer

Explanation

Q12:

2026: 6 June Shift 1

Macro

>

Money & Banking

Easy

Money

Reserve Bank is the only institution which can issue currency. When commercial banks need more funds in order to be able to create more credit, they may go to market for such funds or go to the Central Bank. Central bank provides them funds through various instruments. This role of RBI, that of being ready to lend to banks at all times is another important function of the central bank, and due to this central bank is said to be the lender of last resort. The RBI controls the money supply in the economy in various ways. The tools used by the Central bank to control money supply can be quantitative or qualitative. Quantitative tools, control the extent of money supply by changing the CRR, or bank rate or open market operations. Qualitative tools include persuasion by the Central bank in order to make commercial banks discourage or encourage lending which is done through moral suasion, margin requirement, etc.

Open Market Operations refers to buying and selling of bonds issued by the government in the open market. This purchase and sale is entrusted to the Central bank on behalf of the government. there is another type of operation in which when the central bank buys the security, this agreement of purchase also has specification about date and price of resale of this security. This type of agreement is called a repurchase agreement. The interest rate at which the money is lent in this way is called the repo rate. Similarly, instead of outright sale of securities the central bank may sell the securities through an agreement which has a specification about the date and price at which it will be repurchased. This type of agreement is called a reverse repurchase agreement.

Who is the lender of last resort?

Commercial Banks

Regional Rural Banks

Cooperative Banks

Central Bank

Correct Answer

Option 4

Correct Answer

Explanation

Q13:

2026: 6 June Shift 1

Macro

>

Money & Banking

Easy

Money

Reserve Bank is the only institution which can issue currency. When commercial banks need more funds in order to be able to create more credit, they may go to market for such funds or go to the Central Bank. Central bank provides them funds through various instruments. This role of RBI, that of being ready to lend to banks at all times is another important function of the central bank, and due to this central bank is said to be the lender of last resort. The RBI controls the money supply in the economy in various ways. The tools used by the Central bank to control money supply can be quantitative or qualitative. Quantitative tools, control the extent of money supply by changing the CRR, or bank rate or open market operations. Qualitative tools include persuasion by the Central bank in order to make commercial banks discourage or encourage lending which is done through moral suasion, margin requirement, etc.

Open Market Operations refers to buying and selling of bonds issued by the government in the open market. This purchase and sale is entrusted to the Central bank on behalf of the government. there is another type of operation in which when the central bank buys the security, this agreement of purchase also has specification about date and price of resale of this security. This type of agreement is called a repurchase agreement. The interest rate at which the money is lent in this way is called the repo rate. Similarly, instead of outright sale of securities the central bank may sell the securities through an agreement which has a specification about the date and price at which it will be repurchased. This type of agreement is called a reverse repurchase agreement.

The interest rate at which the money is lent by the central bank with agreement of purchase that has specifications about date and price of resale of this security. This rate is called___

Interest rate

Repo rate

Primary lending rate.

Reverse repo rate

Correct Answer

Option 2

Correct Answer

Explanation

Q14:

2026: 31 May Shift 1

Macro

>

Money & Banking

Medium

Which one of the following is not used as a basis for credit creation?

Wealth held by public

High powered money

Monetary base

Reserve money

Correct Answer

Option 1

Correct Answer

Explanation

Q15:

2026: 31 May Shift 1

Macro

>

Money & Banking

Medium

Which of the following measure of monetary policy can be used to reduce the excess money supply from the economy?

By reducing the bank rate.

By buying government securities through open market operation(OMO).

By increasing cash reserve ratio(CRR).

By reducing statutory liquidity ratio(SLR).

Correct Answer

Option 3

Correct Answer

Explanation

Q16:

2026: 31 May Shift 1

Macro

>

Money & Banking

Medium

Arrange the following measures of money supply (monetary aggregates) in increasing order of liquidity.

A. CU + DD where CU is currency held by the public and DD is net demand deposits of banks

B. CU + DD + Savings deposits with Post Office savings banks

C. CU + DD + Net time deposits of commercial banks

D. CU + DD + Net time deposits of commercial banks + Total deposits with Post Office savings organisations (excluding National Savings Certificates)

Choose the correct answer from the options given below:

A, B, C, D

D, B, C, A

D, C, B, A

C, B, D, A

Correct Answer

Option 3

Correct Answer

Explanation

Q17:

2026: 31 May Shift 1

Macro

>

Money & Banking

Medium

Which of the following statements are correct about monetary policy instruments of RBI?

A. Bank rate is the rate at which RBI lends to commercial banks for long term.

B. Repo rate is the rate at which RBI lends to commercial banks for short period.

C. Open market operation is the buying and selling of government securities by RBI to regulate money supply.

D. Reverse repo rate is the rate at which RBI lends to commercial banks for medium period.

Choose the correct answer from the options given below:

A, B and C only

A, B and D only

A, B, C and D

B, C and D only

Correct Answer

Option 1

Correct Answer

Explanation

Q18:

2026: 21 May Shift 2

Macro

>

Money & Banking

Easy

Who is the custodian of the foreign exchange reserves of the economy?

Central Bank of the country

Commercial Banks

Central Government

World Bank

Correct Answer

Option 1

Correct Answer

Explanation

Q19:

2026: 21 May Shift 2

Macro

>

Money & Banking

Easy

Identify the correct money multiplier formula.

1/1-c

1/CRR

1/SLR

1/c

Correct Answer

Option 2

Correct Answer

Explanation

Q20:

2026: 21 May Shift 2

Macro

>

Money & Banking

Easy

Which measure of money supply is least liquid among the following?

M1

M2

M3

M4

Correct Answer

Option 4

Correct Answer

Explanation

Q21:

2026: 21 May Shift 2

Macro

>

Money & Banking

Easy

Arrange the following statements in the context of impact on money supply by using Open Market Operations (OMO) tool.

A. RBI buys a Government bond in the open market.

B. It leads to increase in money supply.

C. RBI Pays through cheque to the commercial banks.

D. Thus increases the credit creation capacity of commercial banks.

Choose the correct answer from the options given below:

A, B, C, D

A, C, D, B

B, A, D, C

C, B, D, A

Correct Answer

Option 2

Correct Answer

Explanation

Q22:

2026: 20 May Shift 1

Macro

>

Money & Banking

Easy

Match List-I with List-II

List-I	List-II
(A) M1	(I) M1 + Net time deposits of commercial banks
(B) M2	(II) CU +DD
(C) M3	(III) M3+Total deposits with Post Office savings organisations (Except NSC).
(D) M4	(IV) M1 + Saving deposits with post office saving banks.

Choose the correct answer from the options given below:

(A) - (II), (B) - (I), (C) - (III), (D) - (IV)

(A) - (II), (B) - (IV), (C) - (I), (D) - (III)

(A) - (IV), (B) - (II), (C) - (I), (D) - (III)

(A) - (III), (B) - (I), (C) - (IV), (D) - (II)

Correct Answer

Option 2

Correct Answer

Explanation

Q23:

2026: 20 May Shift 1

Macro

>

Money & Banking

Medium

Policy tools to control money supply by the RBI are given below. Identify the correct statements.

(A) Persuasion is a qualitative tool of RBI.

(B) RBI influences money supply through open market operation.

(C) Outright open market operations are temporary in nature.

(D) Selling of a bond by RBI leads to reduction in quantity of reserves.

Choose the correct answer from the options given below:

(A), (B) and (C) only

(A), (C) and (D) only

(A), (B), (C) and (D)

(A), (B) and (D) only

Correct Answer

Option 4

Correct Answer

Explanation

Q24:

2026: 20 May Shift 1

Macro

>

Money & Banking

Easy

Which of the following is not a qualitative tool of Reserve Bank Of India ?

Persuasion..

Moral suasion.

Bank rate.

Margin requirement.

Correct Answer

Option 3

Correct Answer

Explanation

Q25:

2026: 20 May Shift 1

Macro

>

Money & Banking

Easy

Given, Staturary Liquid Ratio=20%

A comercial bank deposits=Rs.1200

How much money the bank can give as a loan ?

1000

960

1060

1050

Correct Answer

Option 2

Correct Answer

Explanation

Q26:

2026: 19 May Shift 2

Macro

>

Money & Banking

Easy

Arrange the following alternative measures of money supply in decreasing order of liquidity.

Where CU= Currency and DD = Demand Deposit

A. CU + DD

B. CU + DD + Net time deposits of commercial banks

C. CU + DD + Savings deposits with Post Office savings banks

D. CU +DD + Net time deposits of commercial banks +Total deposits with Post Office savings organizations (excluding NSC)

Choose the correct sequence from the options given below:

A, B, C, D

A, C, B, D

B, A, D, C

A, B, D, C

Correct Answer

Option 2

Correct Answer

Explanation

Q27:

2026: 19 May Shift 2

Macro

>

Money & Banking

Easy

The RBI controls the money supply in the economy in various ways. The tools used by the Central bank to control money supply can be quantitative or qualitative. Identify the INCORRECT statement from the following in this context.

Open Market Operations refers to buying and selling of bonds issued by the Government in the open market.

The Reserve Bank of India conducts repo and reverse repo operations at various maturities.

Margin requirement is a qualitative tool determined by the Central Bank to control money supply.

If the Central bank decreases the reserve ratio, this would lead to decrease in lending by the banks.

Correct Answer

Option 4

Correct Answer

Explanation

Q28:

2026: 19 May Shift 2

Macro

>

Money & Banking

Easy

The transaction demand for money in an economy can be written in the following form as,

$\frac{1}{k}.M_t^d = T$ , or $v.M_t^d = T$

in the above expression v refers to:

Velocity of circulation

Total value of (nominal) transactions

Total value of money supply

Transaction demand for money

Correct Answer

Option 1

Correct Answer

Explanation

Q29:

2026: 19 May Shift 2

Macro

>

Money & Banking

Medium

Consider the following statements regarding the demand for money and choose the correct statements.

A. Speculative demand for money is inversely related to the rate of interest.

B. Demand for money balance is often referred to as transaction preference.

C. People desire to hold money broadly for speculative and transaction motive.

D. Transaction demand for money is inversely related to the real income of an economy.

Choose the correct answer from the options given below:

A and D only

B and D only

A and C only

B, C and D only

Correct Answer

Option 3

Correct Answer

Explanation

Q30:

2026: 15 May Shift 1

Macro

>

Money & Banking

Easy

In commercial banks, saving and current account deposits are held by the public. There are other deposits like fixed deposits, having a fixed period to maturity and are referred to as _______________.

Recurring Deposit

Time deposits

Aggregate monetary resources

Narrow Money

Correct Answer

Option 2

Correct Answer

Explanation

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