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Syllabus

Money and Banking — Syllabus

Madhya Pradesh Board · Class 12 · Economics

What Money and Banking covers in Madhya Pradesh Board Class 12 Economics: 4 topics, for the 2026-27 session. Topics include Meaning and Functions.

92 questions84 flashcards7 formulas & key relations5 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 · Madhya Pradesh Board Class 12 Economics · 2026-27

Topics in Money and Banking

1

1. Meaning and Functions of Money

  • Money removes the difficulty of barter exchange, where goods are exchanged directly without money.
  • Barter exchange suffers from lack of double coincidence of wants.
  • Money acts as a common medium accepted by both sides in a transaction.
2

2. Demand for Money

  • People hold money mainly for transaction motive and speculative motive.
  • Transaction demand depends on the value of transactions in the economy.
  • Higher income or higher price level raises transaction demand for money.
3

3. Money Supply and Measures of Money

  • In a modern economy, money consists mainly of currency notes and coins and bank deposits.
  • RBI is the central bank of India and was established in 1935.
  • RBI issues currency notes and controls money supply.
4

4. Money Creation by Commercial Banks

  • Banks can create deposits through lending.
  • The fictional goldsmith Lala shows how credit creation works.
  • When Lala lends gold, the borrower can spend it, and the receiver may deposit it back, expanding money.

Key Concepts

Central concept: Money and Banking in Introductory Macroeconomics

MoneySupply of MoneyReserve Bank of IndiaCommercial BanksMoney CreationPolicy ToolsDemand for MoneyBond Market and Interest Rate

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Frequently Asked Questions

What are the important topics in Money and Banking for Madhya Pradesh Board Class 12 Economics?
Key topics in Money and Banking include Meaning and Functions of Money, Demand for Money, Money Supply and Measures of Money, Money Creation by Commercial Banks. Study these first, then practise questions on each for the Madhya Pradesh Board Class 12 board exam.
How should I revise Money and Banking for the Madhya Pradesh Board Class 12 board exam?
Learn the core ideas first, then work through the 92 practice questions on Money and Banking. Revise 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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All Madhya Pradesh Board Class 12 Economics Syllabus

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