money supply, banking & financial institutions section 5 MCQ Questions & Answers Detailed Explanation

Question : 1

Which one of the following governmental steps has proved relatively effective in controlling the double digit rate of inflation in the Indian economy during recent years?

a) enhanced rate of production of all consumer goods

b) pursuing an export oriented strategy

c) streamlined public distribution system

d) containing budgetary deficit and unproductive expenditure

Question : 2

Inflation occurs when aggregate supply is

a) equal to aggregate demand

b) None of these

c) more than aggregate demand

d) less than aggregate demand

Question : 3

Consider the following statements regarding the “Monetary Policy” followed by RBI:

1. It follows a flexible inflation target
2. While inflation is in control, RBI can focus on growth
3. Financial Stability is the explicit mandate of monetary policy
4. Achieving monetary policy objectives will ensure financial stability

a) (i) & (ii) only

b) (ii) & (iv)

c) (i) only

d) (ii), (iii) & (iv)

Question : 4

A rise in ‘SENSEX’ means:

a) a rise in prices of shares of all companies registered with Bombay Stock Exchange

b) an overall rise in prices of shares of group up companies registered with Bombay Stock Exchange

c) a rise in prices of shares of all companies registered with National Stock Exchange

d) a rise in prices of shares of all companies belonging to a group of companies registered with Bombay Stock Exchange

Question : 5

Match the following.

a) i-b, ii-a, iii-c

b) i-a, ii-b, iii-c

c) i-c, ii-b, iii-a

d) i-a, ii-c, iii-b

Question : 6

In India ‘Money and Credit’ is controlled by the

a) Industrial Development Bank of India

b) State Bank of India

c) Reserve Bank of India

d) Central Bank of India