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

Question : 1

Which one of the following is not an instrument of selective credit control in India?

a) Rationing of credit

b) Variable cost reserve ratios

c) Margin requirements

d) Regulation of consumer credit

Question : 2

What are the functions of RBI?

1. Issue of notes
2. Banker to the government
3. Controller of debit
4. Custodian of foreign reserves

a) 2 only

b) 1 only

c) 3 only

d) 4 only

Question : 3

NABARD provides refinance to which of the following types of financial institutions:

1. Commercial Banks
2. Regional Rural Banks
3. State Cooperative Banks & Land Development Banks
4. Non-Banking Financial Companies

a) (ii) & (iii) only

b) (i), (ii) & (iii) only

c) (ii) only

d) All of the above

Question : 4

Consider the following statement:

1. Ad hoc treasury bills are sold to the banks and public and are freely marketable.
2. Regular treasury bills are not sold to the banks and the general public and are not marketable.

a) 2 only

b) 1 only

c) 1 and 2

d) None of the Above

Question : 5

Which of the following statements are true regarding the Foreign Currency Non-Resident (FCNR) Accounts:

1. Resident Indians and NRI's both can open
2. Only Foreign currency can be deposited
3. Rupee can be deposited
4. Can have both demand and time deposits

a) (ii) only

b) (ii) & (iv) only

c) (i) & (ii) only

d) (i), (ii) & (iv) only

Question : 6

Increase in India's trade deficit may lead to which of the following:

a) Depreciation of rupee

b) Appreciation of rupee

c) Increase in money supply in the economy

d) Increase in GDP