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Economics Central Bank
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1. Discount rate of State Bank of Pakistan is:
Less than 5%
More than 5% but not more than 15%
More than 15% but not more than 25%
More than 25%
2. State Bank was established in:
1948
1950
1952
1954
3. 10-rupees note is issued by:
National Bank
State Bank
Govt. of Pakistan
Governor State Bank
4. Acting as lender of last resort a central bank lends to:
Money markets
Stock exchange
Commercial banks
Does not lend
5. Which statement is true of the relationship between bond prices and bond yields?
They vary inversely
They vary directly
They are not related
They are related in long run and not in the short run
6. Which is the most widely used tool of monetary policy:
Clearing house
Open-market operations
Discount rate
Issuing of notes
7. When the State Bank wants to decrease money supply in the country it:
Buys govt. securities in stock market
Sells govt. securities
Lowers discount rate
(b) and (c) of above
8. Monetary policy consists of:
Decreasing taxes
Changing total money supply
Checking commercial banks
Printing of money
9. State Bank of Pakistan has departments:
Issue and banking department
Issue and research departments
Banking and research department
Issue research and banking department
10. Central bank s rate of landing to commercial banks is called:
Interest rate
Discount rate
Money rate
Control rate
11. When a central bank wants to increase money supply in circulation:
Purchases govt. securities
Lowers bank rate
Directs banks to advance more loans
(a) and (b) of above
12. State Bank of Pakistan is run by:
Board of directors
Board of governors
Board of managers
Board of bankers
13. Credit money is controlled by:
Government
Commercial banks
Central bank
Markets
14. Every country establishes central bank to:
Issue notes
Supervise commercial banks
Give loans to businessmen
(a) and (b) of above
15. It is NOT an instrument of monetary policy:
Bank rate
Open market operations
Change in reserve ratio
Issue notes
16. It creates credit:
Central bank
Commercial banks
Government
Stock exchange
17. Which is a monetary measure to increase employment
Increase in govt. expenditure
Reduce govt. expenditure
Increase in interest rate
Reducing interest rate
18. In order to reduce consumer borrowing this is raised:
Commercial bank deposits
Government spending
Interest rate
The exchange rate
19. Which organisation controls the banking system in most countries?
Central bank
Commercial banks
Investment Bank
World Bank
20. Treasury bill is used for
Getting short term loans
Getting long term loans
Treasry bill is not credit instrument
Treasury bill is a govt. tax bill
21. Out of the following the only recognised legal tender is:
Cheque
Bank notes and coins
Bank notes and cheques
Credit card
22. Open market operations is:
Buying and selling bills of exchange
Buying and selling govt. securities
Buying and selling shares of companies
Buying and selling foreign exchange
23. Monetary policy has the objective:
Decrease unemployment rate
Decrease tax rate
Decrease inflation rate
All of the above
24. Every country establishes central bank to:
Issue currency
To prepare government budget
To extablish commercial banks
All of the above
25. It is a monetary employment:
Increase in govt. expenditure
Increase govt. saving
Increase in interest rate
Reducing interest rate
26. In order to reduce consumer borrowing:
Bank deposits are increased
Incomes of govt. employees are reduced
Interest rate is increased
Foreign exchange rate is reduced
27. Which organistion controls the banking system:
Central bank
Provincial bank
Investment Bank
World Bank
28. The money called legal tender includes:
Currency notes and credit cards
Currency notes and bank deposits
Currency notes and cheque
Currency notes and coins
29. Open market operations refer to:
Buying and selling of foreign currencies
Buying and selling govt. securities
Buying and selling shares in stock market
Buying and selling of goods in free market
30. If SLR (statutaory liquidity ratio) is 20% and a bank gets a new deposit of 10 million the total increase in its deposits can rise up to:
20 millions
50 millions
100 millions
200 0millions
31. State Bank policy of regulating interest rate is called:
Banking policy
Monetary policy
Fiscal policy
Commercial policy
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