Banking Awareness Quiz – Set 178

Hello Aspirants,
Welcome to Banking Awareness Quiz in AffairsCloud.com. Here we are creating quiz covering important questions which are common for all the bank exams and other competitive exams.

1. Closed Economy in which _______
   A. Only Import Takes Place
   B. Only Export Takes Place
   C. Both Import and Export take place
   D. Neither Import nor Export takes place
   E. Deficit financing takes place
   

   Answer & Explanation

   D. Neither Import nor Export takes place
   Explanation:
   Closed Economy in which neither import nor export takes place.
   
   
2. A __________ is the sum of the transactions where money is exchanged.
   A. Open Economy
   B. Monetized Economy
   C. Closed Economy
   D. All of these
   E. None of these
   

   Answer & Explanation

   B. Monetized Economy
   Explanation:
   A monetized economy is the sum of the transactions where money is exchanged.
   
   
3. ________ is an economy in which there are economic activities between the domestic community and outside.
   A. Open Economy
   B. Monetized Economy
   C. Closed Economy
   D. All of these
   E. None of these
   

   Answer & Explanation

   A. Open Economy
   Explanation:
   Open Economy is an economy in which there are economic activities between the domestic community and outside.
   
   
4. _______ is when government prints money in order to pay its deficits.
   A. Closed Economy
   B. Open Economy
   C. Monetized deficit
   D. Deficit Financing
   E. None of these
   

   Answer & Explanation

   C. Monetized deficit
   Explanation:
   Monetized deficit is when government prints money in order to pay its deficits.
   
   
5. _______ is when a government spends more than what it earns.
   A. Closed Economy
   B. Open Economy
   C. Monetized deficit
   D. Deficit Financing
   E. None of these
   

   Answer & Explanation

   D. Deficit Financing
   Explanation:
   Deficit Financing is when a government spends more than what it earns.
   
   
6. _____ is a macroeconomic term referring to the monetary base, which is controlled by the institution in a country.
   A. Closed Economy
   B. Open Economy
   C. Monetized deficit
   D. Deficit Financing
   E. High Powered Money
   

   Answer & Explanation

   E. High Powered Money
   Explanation:
   High Powered Money is a macroeconomic term referring to the monetary base, which is controlled by the institution in a country.
   
   
7. A form of financial guarantee insurance, covering not all the debts of the borrower, but a specific loan or other financial transaction is known as _____
   A. Closed Economy
   B. Open Economy
   C. Monetized deficit
   D. Deficit Financing
   E. Credit Wrap
   

   Answer & Explanation

   E. Credit Wrap
   Explanation:
   A form of financial guarantee insurance, covering not all the debts of the borrower, but a specific loan or other financial transaction is known as Credit Wrap.
   
   
8. _______ is the risk of default on a debt that may arise from a borrower failing to make required payments.
   A. Market Risk
   B. Credit Risk
   C. Inflation Risk
   D. All of these
   E. None of these
   

   Answer & Explanation

   B. Credit Risk
   Explanation:
   Credit Risk is the risk of default on a debt that may arise from a borrower failing to make required payments.
   
   
9. ______ is the risk that the value of an investment may decrease due to changes in market factors.
   A. Market Risk
   B. Credit Risk
   C. Inflation Risk
   D. All of these
   E. None of these
   

   Answer & Explanation

   A. Market Risk
   Explanation:
   Market Risk is the risk that the value of an investment may decrease due to changes in market factors.
   
   
10. _______ is the probability that the value of assets and investments will be negatively affected by changes in inflation.
    A. Market Risk
    B. Credit Risk
    C. Inflation Risk
    D. All of these
    E. None of these
    

    Answer & Explanation

    C. Inflation Risk
    Explanation:
    Inflation Risk is the probability that the value of assets and investments will be negatively affected by changes in inflation.