money supply, banking & financial institutions section 1 MCQ Questions & Answers Detailed Explanation

Question : 1

Tarapore Committee was associated with which one of the following?

a) Full capital account convertibility

b) Effect of oil prices on the Indian economy

c) Foreign exchange reserves

d) Special Economic Zones

Question : 2

Consider the following statements:

1. Increase in deposit rate results in higher savings
2. Increase in deposit rate results in fall in credit off takes
3. Increase in deposit rate results in increase in investment

a) 1 & 3

b) 1 & 2

c) 1, 2, 3

d) Only 1

Question : 3

What are “Futures”?

a) Securities or commodities sold or bought with the assumption of delivery at a later stage

b) Particular types and quantities of securities and com-modities bought for selling at higher prices

c) Shares and debentures bought at a cheaper rate and sold later at high rates

d) None of these

Question : 4

Consider the following statements. The function of commercial banks in India includes

1. Purchase and sale of shares and securities on behalf of customers.
2. Acting as executors and trustees of wills.

a) Only 2

b) Neither 1 nor 2

c) Both 1 and 2

d) Only 1

Question : 5

Full convertibility of a rupeee means

a) repayment of loans in terms of rupees

b) determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply

c) purchase of foreign exchange for rupees freely

d) payment for imports in terms of ruppes

Question : 6

Which of the following statements are true regarding “Term Repo Operations”?

1. The interest rate is between reverse repo and repo rate
2. The interest rate is above the repo rate
3. The interest rate is generally fixed
4. The interest rate is generally variable

a) (i) & (iv) only

b) (ii) & (iii) only

c) (i) & (iii) only

d) (ii) & (iv) only