Practice Factors Affecting the Money Supply - 2.2 | Chapter 3: Money and Banking | ICSE Class 12 Economics
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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What is the role of the central bank?

💡 Hint: Think about the institution that regulates the economy.

Question 2

Easy

What does a lower reserve ratio mean for banks?

💡 Hint: Consider the link between reserves and lending capacity.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is one tool central banks use to control money supply?

  • Reserve Ratio
  • Stock Market
  • Interest Rate Swaps

💡 Hint: Look for terms related to banking and regulation.

Question 2

True or False: Higher public demand for cash typically increases the money supply.

  • True
  • False

💡 Hint: Think about what happens to cash versus deposits.

Solve 2 more questions and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

Evaluate a scenario where the central bank raises the reserve ratio. Discuss the potential short-term and long-term effects on the money supply and economic activity.

💡 Hint: Think about the balance between inflation control and economic growth.

Question 2

Analyze case studies where public demand for cash surged. How did banks and the central bank respond to maintain economic stability?

💡 Hint: Consider both immediate and strategic responses in your analysis.

Challenge and get performance evaluation