money supply, banking & financial institutions section 8 MCQ Questions & Answers Detailed Explanation

Question : 1

The largest commercial bank of India is

a) State Bank of India

b) Union Bank of India

c) ICICI

d) NABARD

Question : 2

Demand management to control inflation may lead to:

a) increase in government expenditure

b) expansion of credit

c) increase in unemployment due to contraction of the economy

d) creation of excess liquidity

Question : 3

Consider the following statements.

1. The National Housing Bank, the apex institution of housing finance in India, was set up as a whollyowned subsidiary of the Reserve Bank of India.
2. The Small Industries Development Bank of India was established as a wholly-owned subsidiary of the Industrial Development Bank of India.

a) 2 only

b) 1 only

c) Both 1 and 2

d) Neither 1 nor 2

Question : 4

Consider the following statement:

1. EXIM bank in India was established on January 1, 1982
2. National Housing Bank was established in July, 1988.
3. SIDBI started its operations from April 2, 1990.

a) 2 only

b) 1 only

c) 3 only

d) 1, 2, 3

Question : 5

In the context of the Indian economy, which of the following is/are the purpose/purposes of “Statutory Reserve Requirements”?

1. To enable the Central Bank to control the number of advances the banks can create
2. To make the people’s deposits with banks safe and liquid
3. To prevent the commercial banks from making excessive profits
4. To force the banks to have sufficient vault cash to meet their day-to-day requirements

a) (i) & (ii) only

b) (ii) & (iii) only

c) (i) only

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

Question : 6

Stagflation refers to a situation which is characterised by

a) inflation and rising employment.

b) inflation and rising unemployment

c) stagnant employment and deflation

d) deflation and rising unemployment