money supply, banking & financial institutions section 10 MCQ Questions & Answers Detailed Explanation

Question : 1

Inflation redistributes income and wealth in favour of :

a) Middle class

b) Rich

c) Pensioners

d) Poor

Question : 2

How do we define the terms bull and bear with regard to stock markets?

a) A bull is an optimistic operator who first buys and then sells shares in expectation of the price going up; a bear is a pessimistic market operator who sells the shares in expectation of buying them back at a lower price.

b) Bull is one who first sells a share and then buys it at a lower price; bear means one who first buys and then sells it in expectation of prices going up.

c) There is nothing significantly different as both operate in the capital market.

d) A bull is ready to buy any share; a bear only deals in government securities.

Question : 3

Which of the following is not a function of the Securities and Exchange Board of India (SEBI)?

a) Supervising the working of the Stock Exchanges

b) Regulating merchant banks and mutual funds

c) Underwriting new capital issues

d) promoting the development of a healthy capital market

Question : 4

‘SHG Bank Linkage Programme’ is a programme which encourages India’s banks to lend to self-help groups (SHGs) composed mainly of poor women, this has evolved into an important Indian tool for microfinance. This programme was initiated by ?

a) Reserve Bank of India (RBI)

b) National Bank for Agriculture and Rural Development (NABARD)

c) Agricultural Refinance and Development Corporation (ARDC)

d) Non-Banking Finance Companies (NBFC)

Question : 5

Which of the following are revenue source of RBI?

a) Open market operations

b) Repo operations

c) Management of Forex reserves

d) All of the above

Question : 6

The interest rate at which the Reserve Bank of India lends to Commercial Banks in the shortterm to maintain liquidity is known as

a) Repo rate

b) Reverse repo rate

c) Bank rate

d) Interest rate