JAIIB Exam 2025 – IE&IFS Important Questions MCQs Quiz-15

05/02/2025

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JAIIB Exam 2025 IE&IFS Important Questions MCQs Quiz-15

JAIIB Exam Quiz 2025: The JAIIB exam is scheduled for 2025 by IIBF. Here, we are providing JAIIB IE&IFS MCQ-based quizzes on a regular basis. You can attempt the quizzes regularly to prepare for the upcoming JAIIB exam. The quizzes will be provided module-wise and unit-wise. You can attempt the JAIIB IE&IFS quizzes from the links below and improve your preparation by practicing regularly. These quizzes will help you boost your score in the JAIIB exam and guide you to clear the exam on your first attempt.

Q.1 Which of the following is NOT an element of interest?
a) Payment for the risk involved in making the loan
b) Payment for the trouble involved
c) Payment for the use of money (pure interest)
d) Payment for depreciation of the asset

Q.2 According to the Classical Theory of Interest, the rate of interest is determined by:
a) The government’s monetary policy
b) The equilibrium between demand and supply of savings
c) The central bank’s lending rate
d) The profitability of commercial banks

Q.3 What happens when the interest rate increases, according to the Classical Theory of Interest?
a) Supply of savings decreases, and demand for savings increases
b) Supply of savings increases, but demand for savings decreases
c) Both supply and demand for savings increase
d) Both supply and demand for savings decrease

Q.4 According to Keynes, the rate of interest is a reward for:
a) Saving more money
b) Parting with liquidity (cash balances)
c) Investing in capital goods
d) Depositing money in a bank

Q.5 According to Keynes, investment decisions are primarily influenced by:
a) The rate of interest
b) The marginal efficiency of capital and future expectations
c) The availability of bank loans
d) Government tax policies

Q.6 According to Keynes, savings are primarily influenced by:
a) The rate of interest
b) The level of income
c) Government policies on taxation
d) The inflation rate

Q.7 According to Keynes’ Liquidity Preference Theory, the rate of interest is determined by:
a) The equilibrium of savings and investment
b) The demand for and supply of money
c) The marginal efficiency of capital
d) The inflation rate

Q.8 In a 2-asset economy, Keynes assumed that individuals can hold their wealth in:
a) Gold and real estate
b) Money (currency & current deposits) and long-term bonds
c) Stocks and commodities
d) Savings accounts and mutual funds

Q.9 What is the relationship between bond prices and the rate of interest?
a) They are directly related
b) They are inversely related
c) They are unrelated
d) They move in the same direction

Q.10 According to Keynes’ theory, as the level of income increases in a two-asset economy, the demand for money will:
a) Increase, as people need more money for daily transactions
b) a) Decrease, because people prefer bonds
c) Remain constant, regardless of income changes
d) Fluctuate based on interest rates

Q.11 According to Keynes’ Speculative Motive, the demand for money is lower when the nominal rate of interest is higher because:
a) People are more willing to hold cash
b) People can earn more income by holding bonds instead of money
c) The value of money increases with interest rates
d) People reduce savings when interest rates rise

Q.12 According to Keynes’ Speculative Motive, if the current rate of interest is higher than the expected future rate, people are more likely to:
a) Hold more money and fewer bonds
b) Hold more bonds and less money
c) Hold an equal amount of bonds and money
d) Invest primarily in real estate

Q.13 According to Keynes, the rate of interest (RoI) is determined by the interaction of:
a) Supply and demand for money
b) Savings and investment
c) Government spending and taxes
d) Demand for goods and services

Q.14 According to Keynes, what causes the money demand curve to shift upward?
a) A decrease in nominal income
b) Expectations of a higher rate of interest in the future
c) A decrease in bond prices
d) A decrease in monetary supply

Q.15 The steepness of the IS curve depends on the elasticity of investment demand to changes in the interest rate. When investment demand is highly sensitive to the interest rate, the IS curve will be:
a) Steep
b) Flat
c) Vertical
d) Horizontal

Q.16. In the IS-LM model, the IS curve slopes downward (Classical Theory) and the LM curve slopes upward (Keynesian Theory). The point of intersection of these two curves
represents:
a) The equilibrium level of income
b) The equilibrium level of investment
c) The equilibrium rate of interest
d) The equilibrium savings rate

Q.17 In the IS-LM model, an expansionary monetary policy (increase in money supply) causes the LM curve to shift:
a) Leftward, causing a rise in interest rates and a decrease in income
b) Rightward, causing a fall in interest rates and an increase in income
c) Leftward, causing a fall in interest rates and an increase in income
d) Rightward, causing a rise in interest rates and a decrease in income

Q.18 During periods of high inflation, the Central Bank implements a restrictive monetary policy. A decrease in the money supply causes the LM curve to shift:
a) Rightward, causing a fall in interest rates and an increase in income
b) Leftward, causing a rise in interest rates and a decrease in income
c) Rightward, causing a rise in interest rates and an increase in income
d) Leftward, causing a fall in interest rates and an increase in income

Answer:

Q1: D
Q2: B
Q3: B
Q4: B
Q5: B
Q6: B
Q7: A
Q8: B
Q9: B
Q10: A
Q11: C
Q12: B
Q13: A
Q14: B
Q15: B
Q16: C
Q17: B
Q18: B