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Home » 12th Class » CBSE Notes Class 12 Economics Money and Banking

CBSE Notes Class 12 Economics Money and Banking

by aglasem
March 14, 2023
in 12th Class

Class 12 Economics: Macroeconomics – Money and Banking – Get here the Notes for Class 12 Economics : Macroeconomics – Money and Banking. Candidates who are ambitious to qualify the Class 12 with good score can check this article for Notes. This is possible only when you have the best CBSE Class 12 Economics Notes,study material, and a smart preparation plan. CBSE 2019 Class 12th Exam is approaching and candidates will have to make the best use of the time available towards the last stage of your CBSE Class 12th Economics Preparation. To help you with that, below we have provided the Notes of 12 Economics for topic Macroeconomics – Money and Banking.

  • Class: 12th
  • Subject: Economics
  • Topic: Macroeconomics – Money and Banking
  • Resource: Notes

CBSE Notes Class 12 Economics Money and Banking

Candidates who are pursuing in Class 12 are advised to revise the notes from this post. With the help of Notes, candidates can plan their Strategy for particular weaker section of the subject and study hard. So, go ahead and check the Important Notes for Class 12 Economics : Macroeconomics – Money and Banking.

Money and Banking

1. Barter System Barter system means the direct exchange of one commodity to another.

2. Barter Economy can be termed as C-C economy i.e., Commodity for Commodity economy.

3. Difficulties of Barter System

(i) Lack of double coincidence
(ii) Lack of divisibility
(iii) Lack of common measure
(iv) Difficulty of storage and transfer of wealth
(v) Difficulty in deferred payment

4. Money Money is anything that is generally acceptable as a means of exchange and at the same time, act as a measure and as a store of value.
According to Walker, “Money is what money does”,

5. Functions of Money

(i) Primary Function
(a) Medium of exchange
(b) Measure of value

(ii) Secondary Function of Money
(a) Standard of deferred payments
(b) Store of value
(c) Transfer of value

(iii) Contingent Functions
(a) Distribution of national income
(b) Maximum satisfaction to the consurncrs
(c) Maximum profit to the producers
(d) Basis ofcredit
(e) Liquidity

6. Fiat Money It refers to money by order/authority of the government. It includes notes and coins.

7. Fiduciary Money it refers to money backed up by trust between the payer and the payee.

8. Money Supplier In the modern times.the sources of supply of money are government, central bunk of the country and commercial banks.

9. High powered Money It includes currency (R) with the public and cash (c) reserves with banks. High powered money =R+ C

10 Banking Banking implies accepting deposits of money from the public for the purpose of lending or investment which is repayable on demand and can be withdrawn by means of cheques, draft order etc.

11. Commercial Bank A commercial bank is a financial institution engaged in the business of accepting deposits and making loans to the people.

12. Central Bank A central bank is an apex institution of a country that controls and regulates the monetary and financial system of the country.

13. Functions of commercial Banks

(i) Acceptance of deposits from the public
(ii) Advancing of loans
(iii) Investment of funds
Agency Functions
(a) Remittance of funds
(b) Collection and payment of fund
(c) Sale and purchase of security
(d) Representation and correspondence
(e) Trusteeship
(v) General utility functions
(vi) Credit creation

14. Factors Affecting Credit Creation

(i) Primary cash deposits
(ii) Cash reserve ratio
(iii) Banking habits of the people
(iv) Policy of the central

15. Functions of Central Banks (RBI)

(i) Bank of issue
(ii) Banker, agent and advisor to the government
(iii) Custodian of the cash reserves of commercial banks
(iv) Custodian of nation’s reserves of international currency
(v) Lender ‘ofthe last resort
(vi) Bank of central clearance
(vii) Controller ofmoney supply and credit

16. Instruments of Monetary Policy or Credit Control Measures

(j) Quantitative Instruments
(a) Bank rate
(b) Open market operation
(c) Cash Reserve Ratio (CRR)
(d) Statutory Liquidity Ratio (SLR)
(ii) Qualitative Instruments
(a) Margin requirement
(b) Rationing of credit
(c) Direct action
(d) Moral suasion

17. Cash Reserve Ratio (CRR) It refers to the minimum percentage of a bank’s total deposits required to be kept with the central bank.

18. Statutory Liquidity Ratio (SLR) Every bank is required to maintain a fixed percentage of its assets in the form of cash 0r other liquid assets.

Class 12 Key Points, Important Questions & Practice Papers

Hope these notes helped you in your schools exam preparation. Candidates can also check out the Key Points, Important Questions & Practice Papers for various Subjects for Class 12 in both Hindi and English language form the link below.

Class 12 Physics कक्षा 12 व्यावसायिक अध्ययन
Class 12 Chemistryकक्षा 12 समाज शास्त्र
Class 12 Maths कक्षा 12 अर्थशास्त्र
Class 12 Biology कक्षा 12 भूगोल
Class 12 Business Studies
Class 12 Economics
Class 12 Sociology

Class 12 NCERT Solutions

Candidates who are studying in Class 12 can also check Class 12 NCERT Solutions from here. This will help the candidates to know the solutions for all subjects covered in Class 12th. Candidates can click on the subject wise link to get the same. Class 12 Chapter-wise, detailed solutions to the questions of the NCERT textbooks are provided with the objective of helping students compare their answers with the sample answers.

  • Hindi
  • Physics
  • Chemistry
  • Biology
  • Maths
  • Business Studies

Class 12 Mock Test / Practice

Mock test are the practice test or you can say the blue print of the main exam. Before appearing in the main examination, candidates must try mock test as it helps the students learn from their mistakes. With the help of Class 12 Mock Test / Practice, candidates can also get an idea about the pattern and marking scheme of that examination. For the sake of the candidates we are providing Class 12 Mock Test / Practice links below.

  • Maths
  • Physics
  • Chemistry
  • Biology

Class 12 Exemplar Questions

Exemplar Questions Class 12 is a very important resource for students preparing for the Examination. Here we have provided Exemplar Problems Solutions along with NCERT Exemplar Problems Class 12. Question from very important topics is covered by Exemplar Questions for Class 12.

Physicsगणित
Chemistryभौतिक विज्ञान
Mathsसायन विज्ञान
Biology
Class 12 Economics Notes Maths Notes Economics Notes Sociology Notes
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