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

Question : 1

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 : 2

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 : 3

Which of the following statements will be considered as part of ‘Transfer Payments’ in the balance of payment?

1. Gift sent by an NRI to his friend in India
2. Money sent by an Indian employee to his family in India who has gone abroad temporarily

a) (ii) only

b) Both (i) & (ii)

c) (i) only

d) Neither (i) nor (ii)

Question : 4

Which among the following is not an instrument of qualitative control in India ?

a) Regulation of the Consumer Credit

b) Margin Requirements

c) Rationing of the Credit

d) Variable Costs and Reserves

Question : 5

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 : 6

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