money supply, banking & financial institutions section 3 MCQ Questions & Answers Detailed Explanation

Question : 1

A speculator who enters into a purchase transaction with a view to sell in the near future when the price would have risen is called a

a) Bison

b) Boar

c) Bear

d) Bull

Question : 2

The rate of tax increase as the amount of the tax base increases is called

a) Regressive tax

b) Degressive tax

c) Proportional tax

d) Progressive tax

Question : 3

Prime Minister, on 8th of Nov 2016, declared that the existing Rs. 500 and Rs. 1000 notes will not be legal tender. This was done under which of the following Act.

a) Banking regulation Act 1949

b) Payment and Settlement Systems Act 2007

c) RBI Act 1934

d) Does not require any statutory backing

Question : 4

Which of the following are the provisions of the SARFAESI Act which enables banks to reduce their non-performing assets (NPAs)?

1. Enforcement of Security interests by secured creditors (Banks/ Financial Institutions).
2. Transfer of non-performing assets to asset reconstruction company which will then dispose of those assets and realise the proceeds.
3. To provide a legal framework for securitization of assets.
4. Assisting banks in making the credibility track record of customers under the Credit Information Bureau of India (CIBIL).

a) 1, 2 and 3

b) 1 and 2

c) 2, 3 and 4

d) 1, 2, 3 and 4

Question : 5

Consider the following statements in a market-determined exchange rate system:

1. Imposing tariffs may not help in improving the trade balance as the exchange rate moves to offset the tariff
2. The exchange rate depends on the demand and supply of the two currencies

a) (ii) only

b) Both (i) & (ii)

c) (i) only

d) Neither (i) nor (ii)

Question : 6

What are the reforms of Narsimham Committee on Banking sector?

1. Nationalisation of banks should not take place any more.
2. Private and foreign banks should be set up to promote competition.
3. There should be a phased reduction of CRR and SLR.

a) 2 only

b) 1 only

c) 3 only

d) All of the Above