How much do you know about Money and Banking? Take our quiz and find out!
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Question 1: The lowering of Bank Rate by the Reserve Bank of India leads to __________.
(A) more liquidity in the market
(B) less liquidity in the market
(C) no change in the liquidity in the market
(D) mobilisation of more deposits by commercial banks
Question 2: A proportion of total deposits and reserves of the commercial banks deposited with the Reserve Bank of India is called __________.
(A) Balance of payment
(B) Bank Guarantee
(C) Caution Money
(D) Cash Reserve Ratio
Question 3: An increase in CRR by the Reserve Bank of India results in ___________.
(A) decrease in debt of the government
(B) reduction in liquidity in the economy
(C) attracting more FDI in the country
(D) more flow of credit to desired sector
Question 4: Which one of the following statement is correct regarding increase in the cash reserve ratio in India?
(A) It increases credit creation
(B) It reduces credit creation
(C) It does not affect credit
(D) It denotes liberal monetary policy
Question 5: Credit creation power of the commercial banks gets limited by which of the following?
(A) Banking habits of the people
(B) Cash reserve ratio
(C) Credit policy of the central bank
(D) All of the above
Question 6:Number of times a unit of money changes hands in the course of a year is called ___________.
(A) Supply of money
(B) Purchasing power of money
(C) Velocity of money
(D) Value of money
Question 7:Which among the following is not correct?
(A) Floating exchange rate system works on market mechanism
(B) Floating exchange rate breeds uncertainties and speculation
(C) Economic and political factors and value judgments influence the choice of the exchange rate system
(D) The system of floating exchange rate requires comprehensive government intervention
Question 8: Monetary policy is implemented by ….. in India.
(A) The Ministry of Finance
(B) The Parliament
(C) Planning Commission
(D) Reserve Bank of India
Question 9: One amongst the following take the decision about the monetary policy of India.
(A) Finance Minister of India
(B) Reserve Bank of India
(C) Prime Minister of India
(D) International Monetary Fund
Question 10:Which one of the following is not an instrument of selective credit control in India?
(A) Regulation of consumer credit
(B) Rationing of credit
(C) Margin requirements
(D) Variable cost reserve ratios
Question 11: Which one of the following is not an objective of Monetary policy?
(A) Price Stability
(B) Economic Stability
(C) Equitable distribution of Indian Assets
(D) Foreign Exchange Rate Stability
Question 12: ‘Money is a matter of functions four, a medium, a measure a standard and …..’. What is the fourth function of money indicated in this popular phrase?
(A) A stock
(B) A flow
(C) A store
(D) A payment
Question 13: Which of the following measure of the high power money Supply (H) has been used by RBI in India?
(A) Currency held by public + other deposits with the RBI
(B) Cash reserve of the commercial banks + other deposits with the RBI
(C) Currency held by the public + Cash reserves of the commercial banks + Other deposit with the RBI
(D) Currency held by the public + Cash reserves of the commercial banks + Time deposits of commercial banks + Other deposits with the RBI
Question 14: In India, M3 includes __________.
(A) time deposits with banks
(B) demand deposits with banks
(C) currency with the public
(D) All of the above
Question 15: The sum of which of the following constitutes Broad Money in India?
- Currency with public
- Demand deposits with banks
- Time deposits with banks
- Other deposits with RBI
Choose the correct answer using the codes given below.
(A) 1 and 2
(B) 1, 2 and 3
(C) 1, 2, 3 and 4
(D) 1, 2 and 4
Question 16:When the exchange rate changes from 1 $ = 60 to 1 $ = 58, it means
- Rupee value has appreciated
- Dollar value has depreciated
- Rupee value has depreciated
- Dollar value has appreciated
Which of the statement(s) given above is/are correct?
(A) 1 and 2 are correct
(B) 2 and 3 are correct
(C) 1 and 4 are correct
(D) 2 and 4 are correct
Question 17: The Indian rupee was made convertible into which of the following accounts since March 1993?
(A) Capital Account
(B) Current Account
(C) Both (A) and (B)
(D) Revenue Account
Question 18: Indian rupee had been made fully convertible on __________.
(A) current account on March 1, 1993
(B) current account in August, 1994
(C) capital account in August, 1994
(D) current account in April, 1995
Question 19: Convertibility of the rupee implies ___________.
(A) being able to convert rupee notes into gold
(B) freely permitting the conversion of rupee to other major currencies and vice-versa
(C) allowing the value of the rupee to be fixed by market forces
(D) developing an international market of currencies in India
Question 20: Which of the following is/are treated as artificial currency?
(A) ADR
(B) SDR
(C) GDR
(D) Both ADR and GDR
Question 21: The one rupee Indian note bears the signature of ___________.
(A) Governor, Reserve Bank of India
(B) Secretary, Ministry of Finance
(C) Finance Minister
(D) None of the above
Question 22: In which year the export-import ___________.
(A) 1980
(B) 1982
(C) 1981
(D) 1989
Question 23: In India, the interest rate on savings accounts in all the nationalised commercial banks is fixed by __________.
(A) Union Ministry of Finance
(B) Union Finance Commission
(C) Indian Bank’s Association
(D) Banks itself
Question 24: With reference to the institution of Banking Ombudsman in India, which one of the statements is not
correct?
(A) The Banking Ombudsman is appointed by the Reserve Bank of India
(B) The Banking Ombudsman can consider complaints from non-resident Indians having accounts in India
(C) The order passed by the Banking Ombudsman are final and binding on the parties concerned
(D) The service provided by the Banking Ombudsman is free
Question 25: Consider the following statements.
The function of commercial banks in India includes
- Purchase and sale of shares and securities on behalf of customers.
- Acting as executors and trustees of wills.
Which of the statement(s) given above is/are correct?
(A) Only 1
(B) Only 2
(C) Both 1 and 2
(D) Neither 1 nor 2
Question 26: Which of the following terms indicates a mechanism used by commercial banks for providing credit to the government?
(A) Cash Credit Ratio
(B) Debt Service Obligation
(C) Liquidity Adjustment Facility
(D) Statutory Liquidity Ratio
Question 27: Consider the following actions which the government can take
- Devaluing the domestic currency.
- Reduction in the export subsidy.
- Adopting suitable policies which attract greater FDI and more funds from FIIS.
Which of the above action/actions can help in reducing the current accounts deficit?
(A) 1 and 2
(B) 2 and 3
(C) Only 3
(D) 1 and 3
Question 28: Which of the following measures would result in an increase in the money supply in the economy?
- Purchase of government securities from the public by the Central Banks.
- Deposit of currency in commercial banks by the public.
- Borrowing by the government from the Central Bank.
- Sale of government Securities to the public by the Central Bank.
Select the correct answer using the codes given below.
(A) 1, 2, 3 and 4
(B) 2 and 4
(C) 1 and 3
(D) 1, 2 and 3
Question 29: The basic aim of Lead Bank Scheme is that __________.
(A) big banks should try to open offices in each district
(B) there should be stiff competition among the various nationalised banks
(C) individual banks should adopt particular districts for intensive development
(D) all the banks should make intensive efforts to mobile deposits
Question 30: Consider the following liquid assets.
- Demand deposits with the banks
- Time deposits with banks
- Savings deposits with banks
- Currency
The correct sequence of these assets in the decreasing order of
(A) 1, 4, 3, 2
(B) 4, 3, 2, 1
(C) 2, 3, 1, 4
(D) 4, 1, 3, 2
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