Basics of General Economics - Money and Banking System in India
Exam Duration: 45 Mins Total Questions : 30
Which is not the static function of money
- (a)
As a medium of exchang
- (b)
As a unit of account
- (c)
As encouragement to division of labour
- (d)
As standard of deferred payment
When we say that Money serves as a medium of exchange, we are considering the _______ aspect of Money.
- (a)
Static
- (b)
Dynamic
- (c)
Both (a) and (b)
- (d)
Neither (a) nor (b)
Which of the following is / a determinant(s) of money supply in an economy?
- (a)
Behaviour of the Public
- (b)
Behaviour of Commercial Banks
- (c)
Behaviour of the Central Bank
- (d)
All of the above
In 1998, As per RBI's New Classification, M3 refers to -
- (a)
NM2 + Demand Deposits of the Public with Commercial Banks
- (b)
NM2 + Term Deposits maturity beyond 2 year + call term borrowings of Banking System
- (c)
NM2 + Demand Deposits & Time Deposits with Commercial Banks
- (d)
NM2 + Demand Deposits & Time Deposits with Commercial Banks + All Post Office Deposits
As per RBI's New Classitication, M4 has been excluded from the scheme of monetary aggregates.
- (a)
True
- (b)
False
- (c)
Partially True
- (d)
Nothing can be said
As per RBI's new classitlcation, if Rajesh transfers money from his Savings Account and makes a Fixed Deposit maturing within one year -
- (a)
M1 falls, but M2 rises
- (b)
Ml rises, but M2 falls
- (c)
Both M1 and M2 falls
- (d)
Both M1 and M2 remain constant
In the present context, Total Money Stock in India refers to -
- (a)
NM1
- (b)
NM2
- (c)
NM3
- (d)
NM4
Deposits withdrawable at any time are known as -
- (a)
Current Deposit
- (b)
Demand Deposit
- (c)
Both (a) and (b)
- (d)
None of the above
Identify from the following, which one is not a service offered by a bank?
- (a)
Issue of Letter of Credit, Travellers Cheques
- (b)
Issue of Bank Drafts
- (c)
Safe-keeping of valuables in safe deposit vaults
- (d)
Negotiating a deal between a Buyer and a Seller of property
Which of the following was a cause for nationalization of Commercial Banks?
- (a)
Concentration of economic power
- (b)
Neglect of Priority Sectors
- (c)
Urban bias
- (d)
All of the above
The objective of nationalization is -
- (a)
To control the height of economy.
- (b)
To meet progressively the needs of development of the economy
- (c)
Both (a) and (b)
- (d)
None of the above
Identify the shortcomings of Commercial Banks.
- (a)
Inadequate Growth in comparison to growing population
- (b)
Regional Imbalances in the coverage of Bank Offices
- (c)
Bad Debts
- (d)
All of the above.
Commercial Banks suffer from -
- (a)
Regional Imbalances
- (b)
Increasing Overdues
- (c)
Lower Inefficiency
- (d)
All of the above
Identify which of these is not a function of the Central Bank.
- (a)
Formulating the Government Budget
- (b)
Banker of Banks
- (c)
Arranging for clearing arrangements between Banks
- (d)
All of the above
Commercial Banks have direct dealings with the public in mobilization of deposits. This statement is -
- (a)
True
- (b)
False
- (c)
Partially True
- (d)
Nothing can be said
Lender of the Last Resort means -
- (a)
Government coming to the rescue of poor families
- (b)
Central Bank comes to rescue of Commercial Banks in times of need
- (c)
Deficit Financing
- (d)
Distribution of essential goods in Fair Price Shops
Who is the official "lender of the last resort" in India?
- (a)
State Bank of India
- (b)
Punjab and National BankReserve Bank of India
- (c)
Reserve Bank of India
- (d)
Oriental Bank of Commerce
Which of these are functions of RBI?
- (a)
Specifying Excise and Custom Duty Rates
- (b)
Specifying Income Tax Rates
- (c)
Representing India in International Economic Forums
- (d)
All of the above
_________ is the Apex Bank for agriculture credit in India.
- (a)
RBI
- (b)
SIDBI
- (c)
NABARD
- (d)
ICICI
Provision of finance for export trade is now handled by -
- (a)
Export-Import Bank of India (EXIM Bank)
- (b)
Small Industries Development Bank of India (SIDBI)
- (c)
Reserve Bank of India (RBI)
- (d)
National Bank for Agriculture and Rural Development (NABARD)
Quantitative measures to control credit are also called -
- (a)
General Measures
- (b)
Selective Methods
- (c)
Both (a) and (b)
- (d)
Neither (a) nor (b)
In an inflationary situation, to reduce the demand for Bank Credit, the RBI should -
- (a)
Decrease the Bank Rate
- (b)
Increase the Bank Rate
- (c)
Maintain the Bank Rate at the same level
- (d)
All of these
Which of the following is not controlled by RBI -
- (a)
Cash deposit ratio
- (b)
Cash reserve ratio
- (c)
SLR
- (d)
SCR
In order to Control Credit ___________
- (a)
CRR should be increased and bank rate should be decreased
- (b)
CRR should be reduced and bank rate should be reduced
- (c)
CRR should be increased and bank rate should be increased
- (d)
CRR should be reduced and bank rate should be increased.
When would Commercial Banks have higher funds to provide credit to the customers?
- (a)
When the Central Bank decreases the Reserve Requirements
- (b)
When the Central Bank increases the Reserve Requirements
- (c)
When the Central Bank leaves the Reserve Requirements unchanged
- (d)
When the Commercial Bank increases the lending rate
In an inflationary situation, the RBI should -
- (a)
Increase CRR / SLR, increase Bank Rate
- (b)
Increase CRR / SLR, decrease Bank Rate
- (c)
Decrease CRR / SLR, increase Bank Rate
- (d)
Decrease CRR / SLR, decrease Bank Rate
In a deflationary / depression situation, the RBI should -
- (a)
Increase CRR / SLR, increase Bank Rate
- (b)
Increase CRR / SLR, decrease Bank Rate
- (c)
Decrease CRR / SLR, increase Bank Rate
- (d)
Decrease CRR / SLR, decrease Bank Rate
To encourage credit and more borrowings in certain sectors, the margin requirements should be
- (a)
Increased
- (b)
Decreased
- (c)
Maintained at constant level
- (d)
Nothing can be said
In which of the following sectors, reducing the margin requirements will have the impact of encouraging credit?
- (a)
Housing
- (b)
Agriculture
- (c)
Retail Trade
- (d)
All of the above
Rationing of Credit takes place when -
- (a)
Demand for Credit is Zero
- (b)
Demand for Credit is higher than supply
- (c)
Demand for Credit is low
- (d)
None of the above