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Intermediate Part II

Banking in Pakistan Important Short Questions

Q: Write down the functions of the National Bank.

A: Representative of State Bank of Pakistan 2) Accepting Deposits 3) Issuance of Loans 4) Provision of Easy Exchange

Q: Describe the role of the State Bank of Pakistan in economic growth.

A: 1) Restoration of banking system 2) Training of bank staff 3) Establishment of the capital market 4) Establishment of specialized financial institutions

Q: What is meant by money market?

A: The money market refers to a market where lenders use their surplus funds in the form of short-term loans. These include commercial bills, financial bills, public treasury bills, bonds, sponsorships, etc.

Q: What is meant by the capital market?

A: Market capital refers to the market where long-term loans are issued. The stock market buys and sells shares and securities of companies.

Q: What is meant by E-commerce?

A: E-commerce refers to the exchange of technology-based information and ideas between different business entities to promote business investment in the shortest possible time and cost.

Q: Write down the benefits of commerce.

A: 1) Access to information 2) Online shopping 3) Increase business activity 4) Increase business relationships

Q: What is meant by inflation?

A: When commodity prices continue to rise and the purchasing power of money decreases, such a situation is called inflation.

Q: Write the types of inflation.

A: Demand-pull Inflation 2) Cost-Push Inflation

Q: What is meant by Demand-pull Inflation?

A: When the continuous increase in the prices of goods is due to the increase in the demand for goods, it is called Demand-pull Inflation.

Q: What is meant by Cost-Push Inflation?

A: When the continuous rise in commodity prices is due to the rise in raw material prices and wages of laborers, it is called Cost-Push Inflation.

Q: Explain the causes of inflation in Pakistan.

A: 1) Increase in money supply 2) Increase in population 3) Decrease in production 4) Decrease in value of rupee

Q: Write measures to control inflation in Pakistan.

A: 1) Increase in production of goods 2) Population control 3) Decrease in money supply 4) Agricultural and industrial development

Q: What is meant by Deflation?

A: When commodity prices continue to fall and the purchasing power of money increases, such a situation is called deflation.

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