Money Banking Qestions
Money Banking Qestions
Money Banking Qestions
1. The central bank of a country decides to lower the base rate to stimulate economic growth. Analyze the
potential effects of this decision on borrowing costs, consumer spending, and investment levels.
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2. A commercial bank introduces a new digital banking platform to enhance customer convenience and
reduce operational costs. Evaluate the potential benefits and drawbacks of this innovation, considering
factors such as security, accessibility, and customer satisfaction.
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3. A government introduces a new policy to encourage the use of Islamic finance principles in the banking
sector. Assess the economic and social implications of this policy, including its impact on financial
inclusion, ethical banking practices, and market competition.
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4. A country experiences a surge in counterfeit currency circulating in the economy. Analyze the economic
consequences of this situation, including its impact on consumer confidence, inflationary pressures, and
the credibility of the monetary system.
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5. The central bank implements an expansionary monetary policy by increasing the money supply. Evaluate
the potential effects of this policy on inflation, interest rates, and exchange rates, considering the
influence on investment and export competitiveness.
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6. A commercial bank faces liquidity challenges due to a significant number of non-performing loans.
Explore the economic implications of this situation, including the impact on the bank's ability to lend,
financial stability, and credit availability for businesses and individuals.
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7. A government decides to introduce a limited edition commemorative coin to celebrate a national event.
Assess the economic rationale behind this decision, considering the potential impact on collector
demand, revenue generation, and the perception of the national currency.
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8. A central bank implements a contractionary monetary policy by increasing the reserve requirements for
commercial banks. Analyze the economic effects of this policy on the money supply, lending capacity, and
overall economic activity.
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9. A commercial bank faces reputational damage due to involvement in a high-profile financial scandal.
Evaluate the economic consequences of this situation, including the impact on customer trust, deposit
levels, and the bank's ability to attract new clients.
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10. A government decides to implement a new unit of account for tax purposes, different from the national
currency. Analyze the economic implications of this decision, considering factors such as transaction
costs, currency stability, and the impact on businesses and consumers.
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QMultiple Choice Questions:
1. Which of the following is NOT one of the functions b) The total value of money held in an economy
of money?
c) The interest rate charged on loans by commercial
a) Medium of exchange banks
a) The interest rate charged by commercial banks to 11. Which of the following refers to the main
their customers function of money that allows it to be widely
accepted in exchange for goods and services?
b) The interest rate paid by commercial banks on
customer deposits a) Store of value
d) Increase interest rates 18. The central bank can influence the money supply
through open market operations, which involve:
13. The term "counterfeit" refers to:
a) Buying and selling government securities
a) The divisibility of money
b) Setting interest rates for commercial banks
b) Limited edition banknotes
c) Regulating reserve requirements for commercial
c) Fake or fraudulent currency
banks
d) The portability of money
d) Controlling government spending
14. The primary goal of monetary policy is to:
19. Which of the following best describes the
a) Stabilize prices and control inflation concept of a "store of value"?
b) Promote economic growth and employment a) Money's ability to be easily divided into smaller
units
c) Regulate the banking sector
b) Money's function as a medium of exchange
d) Control government spending
c) Money's ability to retain purchasing power over
time
15. Which of the following is NOT a characteristic of d) Money's use as a unit of account in economic
money? transactions
a) Durability 20. The central bank acts as the "lender of last
b) Limited supply resort," which means it:
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Q# Answer Q# Answer 10 20
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