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Quantitative instruments of monetary policy affect the volume of money supply in the economy. Explanation:- Quantitative instrument of monetary policy comprises the following measures: 1. Repo Rate Policy 2. Bank Rate Policy 3. Reverse Repo Rate Policy 4. Open Market…

All trading companies, manufacturing companies, and other business establishments are non-financing companies. The commission received is considered an operating activity of trading companies. Thus commission received is also known as the Trading Commission Received.

Money Multiplier is also known as Credit Multiplier or Deposit Multiplier. Explanation:- It is also known as credit multiplier and deposit multiplier as commercial banks create more deposits by giving credit to others from the initial deposits. That new deposit…

The above statement is justified in a two-sector economy. In a two-sector economy, there are only two sectors. Firm Households the following statement is justified under the following assumption. Households spend all their income Firms retain nothing as undistributed profit…

Ans – (b) Explanation:- Store of value function of money:- Money as a store of value means that money can be used to transfer purchasing power from present to future. Money is a way to store wealth. It provides security…

Ans – (c) Explanation:- Money as a standard of deferred payments means that money acts as a ‘standard’ for payments, which are to be made in the future. Every day, millions of transactions take place in which payments are not…

Ans – (d) Explanation:- It does not include term deposits with the banks and term deposits are not readily available for payments.

Ans – (b) Explanation:- Limited Legal Tender: It refers to that form of legal tender money, which can be paid in the discharge of a debt up to a certain limit. Beyond this limit, a person may refuse to accept…

Ans – (b) Explanation:- As a medium of exchange, money has removed the major difficulty of lack of double coincidence of wants in the barter system. It separates the acts of sale and purchase of goods and services and helps…

Ans – (b) Explanation: Money as a measure (unit) of value means that money works as a common denomination, in which values of all goods and services are expressed. 1. By reducing the value of all goods and services to…