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11.

An asset is liquid when it is:

A.	Being traded frequently	B.	Earning a good rate of return
C.	Is money or easily converted into money	D.	All of the above

12.

A bank has Rs. 5 million in cash. The minimum reserve ratio is 20%. What is maximum potential increase in total deposits:

A.	0	B.	5 m
C.	10 m	D.	25 m

13.

The following is not a bank liability:

A.	Demand deposit	B.	Time deposit
C.	Saving deposit	D.	Loans

14.

When a commercial bank creates credit, it immediately raises:

A.	Its assets	B.	Its liabilities
C.	Money supply	D.	(a) and (b) of above

15.

Which is the source of interest for a bank:

A.	Advances	B.	Bills discounted
C.	Investments	D.	All of the above

16.

Commercial banks are able to create money by:

A.	Printing money	B.	Making loans
C.	Moral suasion	D.	Selling government bonds

17.

Which is a function of a commercial bank:

A.	Acting as a govt. banker	B.	Fixing the exchange rate
C.	Issuing bank notes	D.	Making loans

18.

When a commercial bank creates credit, its immediate effect is that it raises:

A.	The exchange rate	B.	The interest rate
C.	The money supply	D.	The real national income

19.

Total number of bank branches in Pakistan is:

A.	More than 5000 but less than 10,000	B.	More than 10,000 but less than 15,000
C.	More than 15,000 but less than 20,000	D.	More than 20,000 but less than 25,000

20.

Demand deposits mean:

A.	Saving account	B.	Profit loss account
C.	Chequeable deposits	D.	Time deposits