Class 11 Finance MCQ Chapter 2 Financial System Solutions in English Medium to each chapter is provided in the list so that you can easily browse through different chapters Class 11 Finance MCQ Chapter 2 Financial System Question Answer and select need one. Class 11 Finance MCQ Chapter 2 Financial System Solutions Download PDF. AHSEC Class 11 Banking Multiple Choice Solutions.
Class 11 Finance MCQ Chapter 2 Financial System
Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. AHSEC Class 11 Finance Objective Type Solutions are part of All Subject Solutions. Here we have given HS 1st Year Banking Multiple Choice Question and Answer, HS First Year Banking MCQ Solutions for All Chapters, You can practice these here.
Financial System
Chapter: 2
| MCQ |
1. What is one of the most important vehicles for economic transformation?
(i) Financial system.
(ii) Transportation system.
(iii) Education system.
(iv) Healthcare system.
Ans: (i) Financial system.
2. The term “system” in “Financial System” signifies:
(i) A group of individuals.
(ii) A group of interconnected institutions and activities.
(iii) A set of unrelated markets.
(iv) A single organisation.
Ans: (ii) A group of interconnected institutions and activities.
3. According to the passage, what does a financial system promote in a country?
(i) Industrialization.
(ii) Education reform.
(iii) Standard of living and well-being.
(iv) Military strength.
Ans: (iii) Standard of living and well-being.
4. What role does the financial system play in the national economy?
(i) Movement of goods.
(ii) Movement of funds from surplus to deficit areas.
(iii) Collection of taxes.
(iv) Management of public policies.
Ans: (ii) Movement of funds from surplus to deficit areas.
5. Which of the following is not a sub-system of the financial system?
(i) Financial institutions.
(ii) Financial instruments.
(iii) Financial laws.
(iv) Financial services.
Ans: (iii) Financial laws.
6. What is the primary product of a financial system?
(i) Financial institutions.
(ii) Financial policies.
(iii) Financial assets.
(iv) Financial markets.
Ans: (iii) Financial assets.
7. What key feature of the financial system is directly related to liquidity?
(i) Government regulations.
(ii) Trading in liquidity or provision of liquidity.
(iii) Investment in long-term assets.
(iv) Management of currency exchange rates.
Ans: (ii) Trading in liquidity or provision of liquidity.
8. What happens when a financial system is ineffective in deploying resources on time?
(i) Productivity in the economy increases.
(ii) Productivity in the economy decreases.
(iii) Resources become more accessible.
(iv) Inflation is controlled.
Ans: (ii) Productivity in the economy decreases.
9. What is the purpose of “allocation of risk” in a financial system?
(i) To concentrate all risks in one area.
(ii) To limit, pool, and trade risks within acceptable limits.
(iii) To eliminate all types of financial risks.
(iv) To increase risk for all sectors equally.
Ans: (ii) To limit, pool, and trade risks within acceptable limits.
10. What essential information is provided by financial markets that forms the basis for economic decisions?
(i) Government policies.
(ii) Price information.
(iii) Employment data.
(iv) Consumer preferences.
Ans: (ii) Price information.
11. By reducing the cost of transactions and borrowing, the financial system primarily:
(i) Limits investment opportunities.
(ii) Decreases the rate of return for savers.
(iii) Acts as a motivating factor for public savings and investments.
(iv) Only benefits financial institutions.
Ans: (iii) Acts as a motivating factor for public savings and investments.
12. What is the main purpose of a financial system?
(i) To restrict the movement of funds within an economy.
(ii) To facilitate the transfer of money between investors and borrowers.
(iii) To increase government control over markets.
(iv) To provide grants to financial institutions.
Ans: (ii) To facilitate the transfer of money between investors and borrowers.
13. Which component of a financial system includes banks, insurance companies, and other lending institutions?
(i) Financial instruments.
(ii) Financial markets.
(iii) Financial institutions.
(iv) Regulatory bodies.
Ans: (iii) Financial institutions.
14. In a financial system, which component is primarily responsible for providing different types of financial instruments?
(i) Financial institutions.
(ii) Financial services.
(iii) Financial markets.
(iv) Regulatory bodies.
Ans: (iii) Financial markets.
15. Which of the following entities can participate in financial markets?
(i) Only individuals.
(ii) Only corporate bodies.
(iii) Individuals, government, semi-government, and corporate bodies.
(iv) Only government bodies.
Ans: (iii) Individuals, government, semi-government, and corporate bodies.
