The Moodle Quiz module is slightly more complex than some of the other modules. It comprises of two separate parts: the quiz body, what your learners see and interact with in your Moodle course, and the question bank, which holds all the questions you create. The question bank is like a wardrobe for all your questions. Your wardrobe contains shelves (question categories), where you group questions depending on topics, themes, units, semesters, or any other category you currently use to organize your courses.
The Question Bank module is separate, allowing you to create, hold, reuse, and combine your questions in any combination. Your question bank can comprise multiple-choice, true/false, short answer, numerical short answer, matching, random short-answer matching, calculated, essay, and embedded answers (Cloze).
If you're wondering about that last one, the Cloze question type comprises a piece of text from which a number of words have been removed. A learner is required to insert the missing word(s). In some cases, the missing words are supplied as a single list, from which the student has to select, which in effect is matching a word with the space where it belongs. It's just a matching question.
Moodle also includes description questions, which are really just holding spaces for you to add instructions, pictures, or anything else between a set of questions. Moodle added this functionality, enabling you to include notes or instructions in some of the question types or between question types, because the question setup features don't leave space for instructions.
The neat aspect of populating your categories with questions is that you can reuse them as many times as you like and in as many courses as you like. As your question bank grows, it becomes a valuable, time-saving resource.
The Quiz module has considerable flexibility, allowing you to use it for more than just setting quizzes and tests. Here are few examples of how instructors use Moodle quizzes: