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

Question : 1

Consider the following statements:

1. Debt overhang refers to a debt burden so large that an entity cannot take on additional debt to finance future projects.
2. Debt trap is a situation in which it becomes difficult or impossible to repay the debt

a) (ii) only

b) Both (i) & (ii)

c) (i) only

d) Neither (i) nor (ii)

Question : 2

According to the Chakravarthy Committee, one of the principal causes affecting price stability in India is:

a) existence of black money

b) India’s precarious balance of payment position

c) violent fluctuation in agricultural production

d) fiscal deficit

Question : 3

Open Market Operations refer to __________ .

a) Purchase and sale of Government securities by RBI

b) Deposit mobilisation

c) Borrowings by Scheduled banks from RBI

d) Lending by Commercial banks to industry

Question : 4

Consider the following statements regarding National Housing Bank (NHB):

1. NHB regulates Housing finance companies
2. NHB is regulated by Govt. of India
3. NHB provides direct finance for individual housing loans
4. NHB provides refinance for individual housing loans

a) (i) & (iv) only

b) (ii) & (iii) only

c) (i) & (iv) only

d) (iv) only

Question : 5

The term “Seigniorage” means:

a) The income generated by Government on account of money creation

b) The backup of physical gold required to print currency notes

c) The income generated by the Central Bank on account of money creation

d) It is the nominal value of all the currency notes and coins

Question : 6

In the context of Indian economy, consider the following pairs: Term Most Appropriate description

1. Melt down Fall in stock prices
2. Recession Fall in growth rate
3. Slow down Fall in GDP

a) 2 and 3

b) 1 only

c) 1 and 3

d) 1, 2 and 3