Money & Banking-4

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106. Bank Rate refers to the interest rate at which-
(A) Commercial banks receive deposits from the public
(B) Central bank given loans to Commercial banks
(C) Government loans are floated
(D) Commercial banks grant loans to their customers
Ans. (B)

107. The smaller the Cash Reserve Ratio, the scope for lending by banks is:
(A) Greater
(B) Smaller
(C) Weaker
(D) lesser
Ans. (A)

108. Commercial banks create credit
(A) On the basis of their securities
(B) On the basis of their assets
(C) On the basis of their stocks
(D) On the basis of their deposits
Ans. (D)

109. Bank money refers to
(A) Currency notes
(B) Coins
(C) Gold bullions
(D) Cheques
Ans. (D)

110. If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should
(A) Lower cash reserve ratio
(B) Raise discount rates
(C) Sell government securities
(D) All of the above
Ans. (A)

111. ‘Money’ is an example of-
(A) Sunk capital
(B) Floating capital
(C) Concrete capital
(D) Social capital
Ans. (B)

112. Which one is not a function of money?
(A) Transfer of value
B) Store of value
(C) Price stabillisation
(D) Value measurement
Ans. (C)

113. Which term is not related to banking?
(A) C.R.R.
(B) N.E.E.R
(C) S.L.R
(D) Fixed Deposits
Ans. (B)

114. Scheduled Banks have to be registered with-
(A) SEBI
(B) RBI
(C) Finance Ministry
(D) SBI
Ans. (B)

115. Which natioalised bank of India has a shining star as its emblem?
(A) Syndicate Bank
(B) Indian Bank
(C) Bank of India
(D) Bank of Baroda
Ans. (C)

116. A high Statutory Liquidity Ratio (SLR)
(A) Restricts lending
(B) Increases supply of cash
(C) Provides funds to the state
(D) Increases the strength of the banks
Ans. (A)

117. The major objective of monetary policy is to-
(A) Increase government’s tax revenue
(B) Revamp the Public Distribution System
(C) Promote economic growth with price stability
(D) Weed out corruption in the economy
Ans. (C)

118. Commercial banks lend to which of the following Priority sectors?
(A) Heavy Industries
(B) Agriculture, Small scale industries
(C) Foreign Companies
(D) State government in emergency situation
Ans. (B)

119. “Smart Money” term is used for-
(A) Credit card
(B) Internet Banking
(C) E-Banking
(D) Cash with public
Ans. (A)

120. Open Market Operations refer to-
(A) Borrowings by Scheduled banks from RBI
(B) Lending by Commercial banks to industry
(C) Purchase and sale of Government securities by RBI
(D) Deposit mobilization
Ans. (C)

121. The rate at which RBI gives short term loan to commercial banks is called-
(A) Repo rate
(B) Reverse Repo rate
(C) Bank rate
(D) Cash Reserve rate
Ans. (A)

122. Money transfer through mobile is called __________.
(A) IFSC
(B) ATM
(C) IMPS
(D) IFS
Ans. (C)

123. What is the role of “Ombudsman” in a bank?
(A) To provide quality and speedy redressal ofgrievances of customers.
(B) To provide suggestions for innovativeschemes in the banks.
(C) To inspect the internal working of the branches.
(D) To monitor the poverty alleviation programmes under taken by or implemented by the bank.
Ans. (A)
.
124. The headquarters of RBI is in-
(A) Delhi
B) Kanpur
(C) Mumbai
(D) Nasik
Ans. (C)

125. Which one is not included in Non Banking Financial Institutions (NBFIs)?
(A) EXIM
(B) SIDBI
(C) NABARD
(D) BOI
Ans. (D)

126. If cash reserve ratio decreases, credit creation will___.
(A) Increase
(B) Decrease
(C) Does not change
(D) First decreases than increases
Ans. (A)

127. The SLR is determined by the RBI. SLR stands for-
(A) States Leverage Return
(B) Savings Lease Rate
(C) Statutory Liquidity Ratio
(D) Safe Legal Range
Ans. (C)
128. Which institution in India acts as ‘lender of
the last resort’?
(A) Finance Ministry
(B) Reserve Bank of India
(C) Treasury
(D) Currency Printing Presses
Ans. (B)

129. Which of these is not an Indian Bank?
(A) Axis Bank
(B) HDFC Bank
(C) ICICI Bank
D) HSBC Bank
Ans. (D)

130. At which rate, Reserve Bank of India borrows
money from commercial banks?
(A) Bank Rate
(B) Repo Rate
(C) Reverse Repo Rate
(D) Statutory Liquidity Rate
Ans. (C)

131. Which of the following is not true about a Demand Draft?
(A) It is a negotiable instrument.
(B) It is a banker’s cheque.
(C) It may be dishonoured for lack of funds.
(D) It is issued by a bank.
Ans. (C)

132. Which amongst the following is not a component of monetary policy in India?
(A) Repo rate
(B) Moral suasion
(C) Credit Rationing
(D) Public Debt
Ans. (D)

133. Wh ich one o f the fo l lowing is not an instrument of credit control in India?
(A) Rationing of credit
(B) Direct Action
(C) Open Market operations
(D) Variable cost reserve ratios
Ans. (D)

134. Which of the following rate is charged by banks to their most credit worthy customers?
(A) Prime Lending Rate
(B) Statutory Liquidity Rate
(C) Bank Rate
(D) Repo Rate
Ans. (A)

135. Medium term loans are provided for a period of _____.
(A) 1 year to 2 years
(B) 15 months to 3 years
(C) 15 months to 4 years
D) 1 year to 3 years
Ans. (D)

136. Wh ich among the fo l lowing is not an instrument of fiscal policy?
(A) Taxation
(B) Public expenditure
(C) Public debt
(D) Credit Rationing
Ans. (D)

137. ___________ is an a lternative way of representing the production function.
(A) The Short Run
(B) The Long Run
(C) Isoquant
(D) Average product
Ans. (C)

138. What is the minimum base rate fixed by RBI?
(A) 8.30 %
B) 8.25 %
(C) 9.30 %
D) 10.00 %
Ans. (C)

139. What is the full form of CRR?
(A) Cash Return Ratio
(B) Cash Reserve Ratio
(C) Cash Revenue Ratio
(D) Cash Return Reserve
Ans. (B)

140. Who decides Bank Rate in India?
(A) Finance Minister of India
(B) President of India
(C) Reserve Bank of India
(D) State Bank of India
Ans. (C)

420 Economics Rakesh Yadav Readers Publication Pvt. Ltd.
1. Expenditure, taxation and loan taking policies of government are called as-
(A) Fiscal Policy
(B) Monetary Policy
(C) Bank Policy
(D) Tax Policy
Ans. (A)

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