12th Grade > Economics - 2
MONETARY POLICY MCQs
Total Questions : 28
| Page 3 of 3 pages
Answer: Option B. -> Banks will have to maintain more money as cash or deposits with RBI, hence will have less money to lend or invest, thus reducing the liquidity in the market
:
B
A high value of CRR forces banks to keep more reserves and hence helps increase the value of reserve deposit ratio, thus diminishing the value of the money multiplier and money supply or liquidity in the economy.
:
B
A high value of CRR forces banks to keep more reserves and hence helps increase the value of reserve deposit ratio, thus diminishing the value of the money multiplier and money supply or liquidity in the economy.
Answer: Option A. -> True
:
A
The given statement is true because the commercial banks create this extra amount of money by giving out a part of their deposits as loans.
:
A
The given statement is true because the commercial banks create this extra amount of money by giving out a part of their deposits as loans.
Answer: Option C. -> Both A and B
:
C
In the situation of inflation, the RBI aims to reduce the money supply. So, the RBI can increase CRR and/or SLR. This way, banks will have a lesser lending capacity as they have to use more the deposits as reserves. Thus the money supply will fall.
:
C
In the situation of inflation, the RBI aims to reduce the money supply. So, the RBI can increase CRR and/or SLR. This way, banks will have a lesser lending capacity as they have to use more the deposits as reserves. Thus the money supply will fall.
Answer: Option B. -> Moral suasion
:
B
Moral suasion is a qualitative method, and other options are quantitative methods of monetary policy.
:
B
Moral suasion is a qualitative method, and other options are quantitative methods of monetary policy.
Answer: Option D. -> Decreases
:
D
The money supply decreased by 10,000 Rupees. While the cash was in the borrower’s possession, it was part of the nation’s money supply. As a reserve in a bank, it is not included in the money supply.
:
D
The money supply decreased by 10,000 Rupees. While the cash was in the borrower’s possession, it was part of the nation’s money supply. As a reserve in a bank, it is not included in the money supply.
Answer: Option B. -> shift rightward
:
B
An increase in the money supply increases the aggregate demand, as people now hold more money.
:
B
An increase in the money supply increases the aggregate demand, as people now hold more money.
Answer: Option C. -> Deficit financing
:
C
Out of the given options, deficit financingis not a monetary tool.
:
C
Out of the given options, deficit financingis not a monetary tool.
Answer: Option B. -> Decrease
:
B
A decrease in the money supply will lead to a decrease in price levels.
:
B
A decrease in the money supply will lead to a decrease in price levels.
Latest Videos
Latest Test Papers
Login With Google
Old way of Login
Login With Email