money supply, banking & financial institutions section 4 MCQ Questions & Answers Detailed Explanation

Question : 1

What does venture capital mean?

a) A short-term capital provided to industries

b) Funds provided to industries at times of incurring losses

c) A long-term start-up capital provided to new entrepreneurs

d) Funds provided for replacement and renovation of industries

Question : 2

An outward shift in the demand for money, other things being equal should lead to:

a) A lower interest rate but the same quantity of money

b) A higher quantity of money but lower interest rates

c) A higher interest rate but the same quantity of money

d) A higher quantity of money but the same interest rate

Question : 3

Which one of the following is not a function of the central bank in an economy ?

a) Controlling government spending

b) Acting as a banker’s bank

c) Dealing with foreign exchange

d) Controlling monetary policy

Question : 4

When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen?

a) Foreign Institutional Investors may bring more capital into our country

b) India’s GDP growth rate increases drastically

c) Scheduled Commercial Banks may cut their lending rates

d) It may drastically reduce the liquidity to the banking system

Question : 5

When the exchange rate changes from 1 $ = 60 to 1 $ = 58, it means

1. Rupee value has appreciated
2. Dollar value has depreciated
3. Rupee value has depreciated
4. Dollar value has appreciated

a) 2 and 3 are correct

b) 2 and 4 are correct

c) 1 and 4 are correct

d) 1 and 2 are correct

Question : 6

Consider the following statements:

1. not all banks come under the regulation of the Right to Information Act
2. not all banks come under Schedule 2 of RBI

a) Only 2 is correct

b) Only 1 is correct

c) Both 1 and 2 are correct

d) Neither 1 nor 2 is correct