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

Question : 1

What all are local authorities?

1. City corporations
2. Municipalities
3. Port trusts

a) 2 only

b) 1 only

c) 3 only

d) None of the Above

Question : 2

Consider the following statements:

1. High growth will lead to inflation.
2. High growth will lead to deflation.

a) Only 2

b) Only 1

c) Both 1 and 2

d) Neither 1 nor 2

Question : 3

NABARD is related with

a) National Rural Development Institution

b) National Financial Institution

c) National Bank for Agriculture and Rural Development

d) National Agriculture Development Institution

Question : 4

Which of the following statements correctly expresses the difference between preference shares and equity shares?

a) equity shareholders have no voting right but preference shareholders have voting rights

b) preference shareholders have no right to profit whereas equity shareholders have a right to profit

c) preference shareholders have no have voting rights but equity shareholders have voting rights

d) preference shareholders get exemption from taxes while equity shareholders do not get any exemption

Question : 5

If the supply of money is increased in the economy, then which of the following statements are true:

a) It may lead to decrease in interest rates

b) It will necessarily lead to economic growth

c) It may lead to increase in interest rates

d) None of the above

Question : 6

A reduction in repo rate by RBI may not be transmitted into lending rate in the economy because of:

1. Banks cost of funds remaining high
2. Government offering higher interest on its own savings schemes
3. Liquidity crunch in the economy

a) (ii) & (iii) only

b) (i) & (iii) only

c) (i) & (ii) only

d) All of the above