Banking System and Monetary Operations Quiz
Test your knowledge of monetary economics with questions on central banks, monetary policy, and banking operations.
#1
Which institution acts as the lender of last resort in a country's banking system?
Central Bank
Commercial Bank
Investment Bank
Development Bank
#2
What is the primary function of a commercial bank?
Issuing currency notes
Providing loans and accepting deposits
Regulating monetary policy
Investing in the stock market
#3
Which of the following is NOT considered a function of money in an economy?
Medium of Exchange
Unit of Account
Store of Value
Producer of Goods
#4
What is the term for the rate at which one currency can be exchanged for another?
Interest Rate
Exchange Rate
Inflation Rate
Nominal Rate
#5
What does the term 'Open Market Operations' refer to in the context of monetary policy?
Buying and selling of government securities by the central bank
Borrowing from other central banks
Setting interest rates for commercial banks
Issuing new currency notes
#6
In the context of banking, what does the term 'Liquidity Ratio' measure?
The ratio of liquid assets to total assets
The ratio of deposits to loans
The ratio of profits to losses
The ratio of current assets to current liabilities
#7
What is the term used to describe the interest rate at which the central bank lends to commercial banks?
Prime Rate
Discount Rate
LIBOR
Treasury Rate
#8
What is the term for the process of converting electronic data into unreadable code to secure transactions?
Encryption
Authentication
Decryption
Authorization
#9
What is the function of the Federal Reserve System in the United States?
Fiscal policy formulation
Regulation of international trade
Implementation of monetary policy
Management of social security funds
#10
Which of the following is NOT a function of a central bank?
Issuing currency
Regulating commercial banks
Controlling fiscal policy
Implementing monetary policy
#11
Which of the following is NOT a function of the World Bank?
Providing financial and technical assistance to developing countries
Promoting international trade
Fostering sustainable development
Fighting poverty
#12
What does the term 'Quantitative Easing' involve?
Reducing the money supply to control inflation
Increasing interest rates to stimulate economic growth
Central banks buying long-term securities to increase money supply
Restricting access to credit by financial institutions
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