money supply, banking & financial institutions section 7 MCQ Questions & Answers Detailed Explanation

Question : 1

Recently, one of the well known market analysts made this statement: “We expect the Reserve Bank of India to continue to ease liquidity” Which among the following instruments can be used by RBI to continue to ease liquidity?

1. Cutting the frequency of Open Market Operations
2. Cutting the Cash Reserve Ratio
3. Cutting the Repo and Reverse Repo rates

a) Only 1 & 2

b) Only 1

c) Only 2 & 3

d) 1, 2 & 3

Question : 2

The terms ‘Bull’ and ‘Bear’ are associated with

a) Stock Market

b) Internet Trade

c) Banking

d) Foreign Trade

Question : 3

Consider the following statements.

1. Capital Adequacy Ratio (CAR) is the amount that banks have to maintain in the form of their own funds to offset any loss that banks incur, if the accountholders fail to repay dues.
2. CAR is decided by each individual bank.

a) Only 2

b) Neither 1 nor 2

c) Both 1 and 2

d) Only 1

Question : 4

“Bad money (if not limited in quantity ) drives good money out of circulation.” The above statement is from which among the following laws?

a) Keynes’ law

b) Gresham’s law

c) Wagner’s law

d) Grimm’s law

Question : 5

Which among 1the following is considered to be a part of Shadow Banking in India?

a) Business Correspondents

b) Non-Banking Financial Companies

c) Bankassurance Providers

d) Private Banks

Question : 6

What is the main cost-push factor in India?

1. Problem of hoarding by traders and black marketeers
2. Taxation which gives the traders an opportunity to raise the prices of goods, the proportion of which is often more than the levy of taxes
3. Administered Prices
4. Hike in Oil Prices

a) 1, 2, 3, 4

b) 1, 2, 3

c) 1, 2

d) None of the Above