money supply, banking & financial institutions section 12 MCQ Questions & Answers Detailed Explanation

Question : 1

Consider the following statements regarding Foreign Portfolio Investors (FPI):

1. FPI is mainly into the primary market
2. FPI investment may happen through primary market
3. FPI investment happens only in equity shares
4. FPI investment happens only in debt securities

a) (ii) only

b) (ii) & (iii) only

c) (i) only

d) None of the above

Question : 2

Consider the following statements : The function of the Reserve Bank of India does not include:

1. Open market operations
2. Monitoring revenue collection
3. Supervising non-banking finance companies
4. Review of public expenditure

a) 2 and 4

b) 1 only

c) 1, 3 and 4

d) 1, 2, 3 and 4

Question : 3

When the Reserve Bank of India announces an increase of the Cash Reserve Ratio (CRR), what does it mean?

a) The Reserve Bank of India will have less money to lend

b) The commercial banks will have more money to lend

c) The Union Government will have less money to lend

d) The commercial banks will have less money to lend

Question : 4

The outcome of ‘devaluation of currency’ is

a) increased import and improvement in balance of payment

b) increased export and import

c) increased export and improvement in balance of payment

d) increased export and foreign reserve deficiency