money supply, banking & financial institutions section 11 MCQ Questions & Answers Detailed Explanation

Question : 1

Name of four institutions that are regulated by the RBI as all-India FIs:

1. Export Import Bank of India (EXIM Bank)
2. National Bank for Agriculture and Rural Development (NABARD)
3. National Housing Bank (NHB)
4. Small Industries Development Bank of India (SIDBI)

a) 3 and 4

b) 1 and 2

c) 1, 3, 4

d) 1, 2, 3, 4

Question : 2

_______ deals with long-term finance (more than 365 days) funds. It includes all facilities and institutional arrangements available for borrowing and lending of term funds (including medium-term).

1. Capital market
2. Stock market
3. Debit
4. Credit

a) 2 only

b) 1 only

c) 3 only

d) 4 only

Question : 3

The purpose of devaluation is to :

a) discourage exports

b) encourage import

c) be little foreign currencies

d) encourage exports

Question : 4

Bring out the only incorrect statement:

a) Reverse Repo operation by RBI aims at injecting/ increasing liquidity

b) Rupee appreciation results in decrease in imports

c) SDR refers to special drawing rights

d) Increase in inflation rate leads to decline in real interest rate

Question : 5

The term "Nostro Account" was recently in the news is related to:

1. It is an account that one bank holds in another bank
2. It is used to facilitate international transactions

a) (ii) only

b) Both (i) & (ii)

c) (i) only

d) Neither (i) nor (ii)

Question : 6

Consider the following statements regarding Money Multiplier:

1. It increases with an increase in reserve requirements of banks
2. It decreases with an increase in reserve requirements of banks
3. It increases with Monetary Base
4. It decreases with Monetary Base

a) (ii) only

b) (ii) & (iii) only

c) (i) only

d) (ii) & (iv) only