MCQs
Total Questions : 550
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Answer: Option C. -> Credit Card
Answer: (c)
Credit cards are sometimes considered as smart money since they enable transactions without the need for physical cash and that, too, is a convenient manner.
It is plastic money that is used to pay for products and services at over 20 million locations around the world. In purely economic terms, Smart Money refers to investments made by people experienced in matters of finance.
Answer: (c)
Credit cards are sometimes considered as smart money since they enable transactions without the need for physical cash and that, too, is a convenient manner.
It is plastic money that is used to pay for products and services at over 20 million locations around the world. In purely economic terms, Smart Money refers to investments made by people experienced in matters of finance.
Answer: Option C. -> Monetary policy
Answer: (c)
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank.
CRR is a crucial monetary policy tool and is used for controlling the money supply in an economy.
Answer: (c)
Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank.
CRR is a crucial monetary policy tool and is used for controlling the money supply in an economy.
Question 73. Consider the following statements regarding Reserve Bank of India.
- It is a banks to the Central Government.
- It formulates and administer monetary policy.
- It acts as an agent of government in respect of India.
- It handles the borrowing programme of Government of India.
Answer: Option C. -> 1, 2, 3 and 4
Answer: (c)
Answer: (c)
Answer: Option A. -> i-b, ii-a, iii-c
Answer: (a)
Public goods include,
national defence,
police,
general administration,
Merit goods include primary education,
immunisation,
public health programme,
Non-merit goods include pollution caused by automobile emissions.
Answer: (a)
Public goods include,
national defence,
police,
general administration,
Merit goods include primary education,
immunisation,
public health programme,
Non-merit goods include pollution caused by automobile emissions.
Answer: Option C. -> Reserve Bank of India
Answer: (c)
Answer: (c)
Question 76. As per Section 24 (2A) of Banking Regulation Act 1949, every banking company in India has to maintain equivalent to an amount which shall not at the close of the business on __________ be less than 25% of the total of its net demand and time liabilities, which is known as SLR.
Which among the following is the correct option?
Which among the following is the correct option?
Answer: Option A. -> Any Day
Answer: (a)
Answer: (a)
Answer: Option C. -> Credit will increase
Answer: (c)
The bank rate also referred to as the discount rate, is the rate of interest that the central bank charges on the loans and advances to a commercial bank. Whenever the banks have any shortage of funds they can borrow them from the central bank. Repo (Repurchase) rate is the rate at which the central bank lends short-term money to the banks against securities.
A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases borrowing from the central bank becomes more expensive. It is more applicable when there is a liquidity crunch in the market.
Answer: (c)
The bank rate also referred to as the discount rate, is the rate of interest that the central bank charges on the loans and advances to a commercial bank. Whenever the banks have any shortage of funds they can borrow them from the central bank. Repo (Repurchase) rate is the rate at which the central bank lends short-term money to the banks against securities.
A reduction in the repo rate will help banks to get money at a cheaper rate. When the repo rate increases borrowing from the central bank becomes more expensive. It is more applicable when there is a liquidity crunch in the market.
Answer: Option C. -> Free market policy
Answer: (c)
The Central Bank of a country regulates money supply with the help of open market operations, changing the reserve requirements (CRR) and changing discount rate (bank rate).
Besides, banks are required to maintain liquid assets in the form of gold, cash and approved securities (margin requirements); also known as Statutory Liquidity Ratio.
In India, the Reserve Bank of India has recently been resorting more to open market operations.
Answer: (c)
The Central Bank of a country regulates money supply with the help of open market operations, changing the reserve requirements (CRR) and changing discount rate (bank rate).
Besides, banks are required to maintain liquid assets in the form of gold, cash and approved securities (margin requirements); also known as Statutory Liquidity Ratio.
In India, the Reserve Bank of India has recently been resorting more to open market operations.
Answer: Option D. -> 3 only
Answer: (d)Inflation benefits borrowers, as it leads to a fall in the real cost of capital. But this is only a temporary phase and the interest rate is bound to go up to compensate for the inflation.
Answer: (d)Inflation benefits borrowers, as it leads to a fall in the real cost of capital. But this is only a temporary phase and the interest rate is bound to go up to compensate for the inflation.
Question 80. Consider the following statements regarding the 'Monetary Policy Framework' that exists between Govt. of India and Reserve Bank of India:
Select the correct answer using the code given below:
- The primary objective of Monetary Policy is price stability
- There is a flexible target for inflation that RBI needs to achieve
- Monetary Policy Framework is operated by RBI
- If RBI fails to achieve the target, it needs to submit a report to the Govt. of India stating reasons for failure
Select the correct answer using the code given below:
Answer: Option D. -> All of the above
Answer: (d)
The monetary policy framework in India, as it is today, has evolved over the years.
A new “Monetary Policy Framework” Agreement was signed between the Government of India and RBI in Feb 2015. As per the new monetary policy framework agreement, the following are the important points:
The objective of the monetary policy is
to primarily maintain price stability, while keeping in mind the objective of growth
The monetary policy framework is operated by RBI
The inflation target is 4% with a band of +/- 2%
The inflation target is decided by the Government of India in consultation with RBI
The inflation is the “Consumer Price Index (CPI) – Combined” published by the Ministry of Statistics and Programme Implementation (NSO)
The RBI shall be seen to have failed to meet the Target if inflation is more than 6% or less than 2% for three consecutive quarters
In case RBI fails to meet the target, it will have to give a written report to the Government of India explaining the reasons for failure, remedial actions to be taken and an estimated time period within which the Target would be achieved
Answer: (d)
The monetary policy framework in India, as it is today, has evolved over the years.
A new “Monetary Policy Framework” Agreement was signed between the Government of India and RBI in Feb 2015. As per the new monetary policy framework agreement, the following are the important points:
The objective of the monetary policy is
to primarily maintain price stability, while keeping in mind the objective of growth
The monetary policy framework is operated by RBI
The inflation target is 4% with a band of +/- 2%
The inflation target is decided by the Government of India in consultation with RBI
The inflation is the “Consumer Price Index (CPI) – Combined” published by the Ministry of Statistics and Programme Implementation (NSO)
The RBI shall be seen to have failed to meet the Target if inflation is more than 6% or less than 2% for three consecutive quarters
In case RBI fails to meet the target, it will have to give a written report to the Government of India explaining the reasons for failure, remedial actions to be taken and an estimated time period within which the Target would be achieved
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