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Money and Banking

Bihar Board · Class 12 · Economics

Complete topic list for Money and Banking in Bihar Board Class 12 Economics. Key concepts, sub-topics, and what to focus on for board exams.

34 questions24 flashcards5 concepts

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A comparison showing the difficulties of a barter system (double coincidence of wants, storage issues) versus the ease of transactions with money as a medium of exchange, unit of account, and store of
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4 Topics · Bihar Board Class 12 Economics

Topics in Money and Banking

1

Functions of Money

  • Money acts as a medium of exchange, eliminating the need for double coincidence of wants in barter system
  • Money serves as a unit of account - all goods and services can be expressed in monetary units
  • Money functions as a store of value - wealth can be stored for future use
2

Demand for Money

  • Transaction motive: Money needed for day-to-day transactions
  • Speculative motive: Money held for investment opportunities based on interest rate expectations
  • Transaction demand increases with income level
3

Supply of Money and Banking System

  • Money supply includes currency notes, coins, and bank deposits
  • Reserve Bank of India (RBI) is the central bank established in 1935
  • Commercial banks accept deposits and provide loans
4

Money Creation by Banking System

  • Banks create money through credit creation process
  • Not all depositors withdraw money simultaneously
  • Banks lend excess reserves after keeping required reserves

Key Concepts

Barter system involves direct exchangeMoney serves four main functionsPeople demand money for two mainMoney supply includes currency (notesRBI is India's central bank established

Frequently Asked Questions

What are the important topics in Money and Banking for Bihar Board Class 12 Economics?
Money and Banking covers several key topics that are frequently asked in Bihar Board Class 12 board exams. Focus on the core concepts listed on this page and practise related questions to build confidence.
How to score full marks in Money and Banking — Bihar Board Class 12 Economics?
Understand the core concepts first, then work through the 34 practice questions available for this chapter. Revise formulas and definitions regularly, and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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