NCERT Solutions for Class 12 Macro Economics Chapter-3

Class 12 NCERT Solutions Macro Economics - Money and Banking - Free PDF Download

The branch of economics that deals with the behaviour, decision making, structure, and performance of a country as a whole is called Macroeconomics. Derived from the Greek word ‘Makros’ meaning large, it deals with the issues and relationship of the country’s economy as a whole. A student from Macroeconomics Class 12 Chapter 3 learns the ideals of the capitalist economy, which includes factors like the role of government, private sector, external sector or foreign and business.

Do you need help with your Homework? Are you preparing for Exams?
Study without Internet (Offline)
NCERT Solutions for Class 12 Macro Economics Chapter 3 Money and Banking part-1

NCERT Solutions for Class 12 Macroeconomics Chapter 3 Money and Banking

For all-round development of young children, the chapter is broadly categorized into topics like functions of money, barter system and fiat money and repo rate. Moreover, there are topics like a supply of money, banking system, credit creation by commercial banks, demonetization etc.


Macroeconomics Class 12 Chapter 3 includes chapters designed under expert supervision to enhance knowledge of how money works. The standard medium of exchange holds both primary and contingent functions to run a healthy economy.


The solutions deal with these ideas and offer questions to sharpen the reasoning and logical skill of students. Moreover, this solution of Chapter 3 of Macroeconomics Class 12 by Vedantu is available in PDF format to ease out the learning process.

You can refer to these solutions for revision to score high flying grades in board exams.


CBSE Class 12 Macroeconomics Chapter 3 Solutions

The solutions and exercise of NCERT solutions for Class 12 Macroeconomics Chapter 3 give the reason why money is an essential factor in India and how it facilitates exchange under RBI’s control.

The fourteen questions in the solution deal with functions of money demand and equations related to it.


Question 1: Class 12th Macroeconomics Chapter 3

The first question asks students how the barter system works and its drawbacks.


Question 2: Macroeconomics Class 12 Chapter 3

This second question from Macroeconomics Class 12 Chapter 3 asks students about the functions of money. They have to answer how money overcomes the shortcomings of a barter system.


(image will be uploaded soon)


Question 3: Class 12th Macroeconomics Chapter 3

The third question of macroeconomics solution makes students answer the transaction demand for money. The relation with the value of transaction over a specific period is also needed to calculate.


Question 4: Class 12 Macroeconomics Chapter 3

Four number question of Macroeconomics Class 12 Chapter 3 deals with an equation where the bond promise is Rs.500 at the end of two years with no interim return and rate of interest is 5%. Here students have to calculate the price of the bond.


Question 5: Macroeconomics Chapter 3 Class 12

This question makes students answer the speculative demand for money inversely related to the rate of interest.


Question 6: Ch 3 Macroeconomics Class 12

In this sixth question of Macroeconomics Class 12 Chapter 3, students are needed to answer what is the liquidity trap.


(image will be uploaded soon)


Question 7: Macroeconomics Class 12 Chapter 3

Here in the 7th question, the students need to answer the alternative definition of supply of money.


Question 8: Chapter 3 of Macroeconomics Class 12

In the 8th question, students need to write down the definition of legal tender and fiat money.


Question 9 and 10: Class 12th Macroeconomics Chapter 3

This ninth question of Macroeconomics Class 12 Chapter 3 requires the student to define the high powered money. While in 10th question, they have to explain the function of a commercial bank.


Question 11: CBSE Class 12 Macroeconomics Chapter 3 Solutions

This question needs learners to explain money multiplier, its value and how ratio plays an essential role in the determination of the value of money multiplier.


Question 12: NCERT solutions Class 12 Macroeconomics Chapter 3

In this question, the instruments of RBI’s monetary policy and how it stabilizes money supply against exogenous shock is needed to answer.


Question 13 and 14: NCERT Solutions for Class 12 Macroeconomics Chapter 3

Whether the commercial bank can be considered the creator of money in the economy and the role of RBI known as the lender of last resort is needed to be answered in the 13th and 14th question.


Marks Distribution of Class 12th Macroeconomics Chapter 3

The Macroeconomics Class 12 Chapter 3 is divided into knowledge (30%), understanding (50%) and application (20%). This chapter money and banking carry a total of 8 marks where two marks are rewarded for four short answer type questions.


Money and Banking

Knowledge

Long Answer

-

SAI

4(2)

VSA

-


Benefits of Referring to NCERT Solutions Class 12 Macroeconomics Chapter 3

Referring to the NCERT solution for board exam will benefit a student in the following ways -

  • Practice of crucial topics related to money and banking.

  • An in-depth understanding of the complexity of Indian economics and its policy.

  • Questions and solutions prepared under expert supervision.

  • Readily downloadable in PDF format.

Economics requires students to study the chapters thoroughly and understand the concepts by following proper study materials. Therefore, Macroeconomics Class 12 Chapter 3 solution is a smarter way to secure an excellent grade in the exam.

FAQs (Frequently Asked Questions)

1. How to Score Well in Class 12th Macroeconomics Chapter 3 for Boards?

To ace in Economics exam, one needs to have a quantitative and qualitative study which involves attending crucial lectures, taking notes, devoting time for revision, practising from the question paper and grasping definitions. If a student answers the questions with a graph and follows a mark scoring pattern of answering then scoring well will be easy.


A good technique of smart answering is to highlight the significant points and use bullet points to enhance visibility. Selecting the questions with internal choices to attempt, and marking them beforehand will be beneficial. Again referring to NCERT books and solutions will be fruitful for a 12th class student.

2. What is the Demand and Supply of Money?

The money supply is the total amount of monetary assets available in an economy at a period. Moreover, the demand for money involves the desired holding of financial assets which is recorded as it affects the inflation, exchange rate, price level of goods, and the business cycle.


It also expands the supply of money more slowly than average. This process is implemented to deal with unemployment and inflation of a country.  Bonds, GDP, flat money, demand deposits, etc. also determines the working of money and supply.

3. What do you Mean by Demonetization?

The act of stripping a currency unit of its status as a legal tender of a country is called  Demonetization. It has been used as a tool to steady the currency and fight inflation for a smooth flow of economy and trade. This is a way to replace the old money with new currency and keep a check on black and grey markets.


The Indian government in 2016 decided to demonetize the 500 and 1000 rupee notes. Without warning, Prime Minister Narendra Modi announced the two prominent denominations of a currency system to be stopped and exchange them for newly introduced 2000 rupee and 500 rupee bills.

4. What is Macro?

Macro is the truncated name used for a division of the subject Economics, known as Macroeconomics. Macro basically means ‘large’ and as a subject, it relates to the monetary issues of the world as a whole. This is where the concept of large comes in. This branch of the subject deals with the economic and monetary behaviour of the country, its decision-making policies, and the structural setup as a whole.

5. What are the main concepts covered in Macro?

Macroeconomics makes a student aware about the economy of a country, the monetary structural setup, the economic hierarchies of how the cash flows in a country, and various ideals and policies of the Government. Students are expected to know about foreign policies, demonetisation, banking systems, and barter systems. The answers to all the questions from Chapter 3 of the Class 12 Macroeconomics are given in the NCERT Solutions provided by Vedantu at free of cost.

6. Do I need to practice all the questions provided in NCERT Solutions of Class 12 Macroeconomics Chapter 3?

Students should practice all the questions provided in Class 12 Macroeconomics Chapter 3 NCERT Solutions because the questions are structured to cover all the important topics from the Chapter and help students understand the concepts better by getting a proper idea. They can refer to these solutions to get an idea about how to write the answers in the exam. This will also help you to score good marks in your board exams since the NCERT Solutions follow the same pattern as boards. The PDFs of these NCERT Solutions can also be downloaded from the Vedantu app for free.

7. From where can I download the NCERT Solutions of Class 12 Macroeconomics Chapter 3?

If you want to download the NCERT Solutions of Class 12 Macro Chapter 3, you can follow these steps:

  • Visit the page NCERT Solutions for Class 12. Choose the desired chapter.

  • You will find the NCERT Solutions for Chapter 3 of Class 12 Macroeconomics on this page.

  • You can click on the Download PDF button to download the pdf of these solutions to refer them offline.

  • Once it redirects you to the next page,  you will find the link to download the PDF.

8. What is a Barter System?

The barter system is referred to as a system of exchange in which goods are exchanged without the involvement of money. Though it is an age-old system of goods exchange, it is also applicable in the economic setup in present times where the economy is exchanged without any monetary transaction. The barter system is used in a scenario where the demand for two commodities is equally present, which is a coincidence of commodities.

Share this with your friends
SHARE
TWEET
SHARE
SUBSCRIBE