Prelims Test State Batch 22 Oct 2026

1 / 10

Q1. Under the paper currency standard:

Paper notes are fully convertible into gold

Paper notes are not convertible into gold or silver, and their value rests on government authority

Paper notes are fully backed by silver

Only coins are used as money

2 / 10

Q2. Which of the following is NOT legal tender in India?

₹10 coin

₹500 note

Cheque

Digital Rupee (e₹)

3 / 10

Q3. Demonetisation means:

Printing new currency notes

Removing the legal tender status of a currency unit

Reducing the value of the rupee against the dollar

Withdrawing only coins from circulation

4 / 10

Q4. promise “I promise to pay the bearer the sum of … rupees” on a ₹500 note is signed by:

The Finance Minister

The Finance Secretary

The Governor of RBI

The President of India

5 / 10

Q5. person sells his house in Shimla and uses the money to buy a flat in Chandigarh. Which function of money does this show?

Medium of exchange

Measure of value

Transfer of value

Standard of deferred payments

6 / 10

Q6.Consider the following statements:

1.The Digital Rupee (e₹) is legal tender.

2.Coins of ₹1 and above are unlimited legal tender.

3.Banknotes issued by RBI are unlimited legal tender.

Which of the above are correct?

1 only

1 and 3 only

2 and 3 only

1, 2 and 3

7 / 10

Q7. Which of the following was a stated objective of the 2016 demonetisation?

Boosting exports

Curbing black money, counterfeit notes and terror financing

Reducing interest rates

Raising income tax rates

8 / 10

Q8.Consider the following statements about Bhutan’s GNH Index:

It measures well-being across nine domains.
Good governance is one of the four pillars of GNH.
It measures happiness using per capita income alone.

Which of the above are correct?

1 and 2 only

2 and 3 only

1 and 3 only

1, 2 and 3

9 / 10

Q9. Which of the following statements about Indian currency is correct?

RBI issues all banknotes and coins.

The ₹1 note is issued by the Government of India and signed by the Finance Secretary.

Coins are minted by RBI at its own mints.

The ₹2000 note stopped being legal tender after its withdrawal in 2023.

10 / 10

Q10.Consider the following statements about the functions of money:

1.Medium of exchange and measure of value are primary functions of money.

2.Store of value is a secondary function of money.

3.Money is a perfect store of value even during high inflation.

Which of the above are correct?

1 only

1 and 2 only

2 and 3 only

1, 2 and 3

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Prelims Test State Batch 22 Oct 2026

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