money supply, banking & financial institutions section 2 MCQ Questions & Answers Detailed Explanation

Question : 1

Consider the following statement:

1. Bombay Stock Exchange (BSE) is India’s oldest stock exchange
2. It formally came into being in 1888
3. It was a regional exchange till 2002 when it became a national exchange

a) 2 only

b) 1 only

c) 3 only

d) None of the Above

Question : 2

It is said that, in order to control inflation, foreign inflow needs to be sterlised. Sterlisation here refers to:

a) ensuring that black money is accounted.

b) ensuring that counterfeit currency does not enter circulation

c) compliance with import-export regulations

d) withdrawing equivalent local currency to maintain a desirable rate of exchange

Question : 3

Monetary policy is implemented by ..... in India.

a) The Parliament

b) Reserve Bank of India

c) Planning Commission

d) The Ministry of Finance

Question : 4

In India, rural incomes are generally lower than the urban incomes. Which of the following reasons account for this?

1. A large number of farmers are illiterate and know little about scientific agriculture.
2. Prices of primary products are lower than those of manufactured products.
3. Investments in agriculture has been low when compared to investment in industry.

a) 1 and 2

b) 2 and 3

c) 1 and 3

d) 1, 2 and 3

Question : 5

Capitalism is based upon “Laissez-faire system”. What is “Laissez-faire system”?

a) No governmental intervention

b) Role of market forces is minimum

c) Maximum governmental intervention

d) Limited government Intervention

Question : 6

If a country is experiencing inflation then what will decrease:

a) The output of goods and services

b) The amount of money needed to purchase a given quantity of goods and services

c) Wage level

d) Purchasing Power