money supply, banking & financial institutions section 6 MCQ Questions & Answers Detailed Explanation

Question : 1

Which among the following are the ‘Credit-Rating Agencies’ of India?

1. CRISIL
2. CARE
3. ICRA
4. ONICRA

a) 1, 2 and 3

b) 1 and 3

c) 1, 3 and 4

d) All of them

Question : 2

A commercial bank law creates credit only if it has

a) Permission of Reserve Bank of India

b) Cooperation of other banks

c) Cash in the vault

d) Excess reserves

Question : 3

Pegging up of a currency means, fixing the value of a currency

a) at a higher level

b) leaving it to market forces

c) at a constant level

d) at a lower level

Question : 4

Which one of the following is not a feature of “Value Added Tax” ?

a) It is multi-point destination-based system of taxation.

b) It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer.

c) It is a tax levied on value addition at each stage of transaction in the production distribution chain.

d) It is basically a subject of the central government and the state governments are only a facilitator for its successful implementation.

Question : 5

Other things being equal, what would be the impact of an increase in net capital inflow on the Indian currency?

a) There would be an increase in the demand for the American dollar and an appreciation of the currency.

b) There would be an increase in the supply of the American dollar and an appreciation of the currency.

c) There would be a decrease in the demand for the rupees (`) and a depreciation of the currency.

d) There would be a decrease in the supply of the American dollar and a depreciation of the currency.

Question : 6

Consider the following statements. The price of any currency in international market is decided by the

1. World Bank
2. Demand for goods/services provided by the country concerned.
3. Stability of the government of the concerned country.
4. Economic potential of the country in question of these statements.

a) 2 and 3

b) 1 and 4

c) 3 and 4

d) 1, 2, 3 and 4