banking, security market & insurance section 2 Practice Questions Answers Test with Solutions & More Shortcuts
Banking, Security Market & Insurance PRACTICE TEST [5 - EXERCISES]
banking, security market & insurance section 1
banking, security market & insurance section 2
banking, security market & insurance section 3
banking, security market & insurance section 4
banking, security market & insurance section 5
Question : 6
When the RBI wants to inject liquidity into the economy, it may adopt the following :
- Buy the government securities from the banks.
- Enter into reverse repo operations
- Raise cash Reserve Ratio
- Reduce SLR.
a) 1, 2 and 4 only
b) 1 and 4 only
c) 1 only
d) 1, 2, 3 and 4
Answer »Answer: (b)
By buying the government securities from the banks and reducing SLR may inject money into the system.
However, Raising the cash Reserve Ratio may take away liquidity from the market as the banks will have to deposit more money with the RBI and similarly entering the reverse repo operations may also take away liquidity from the market.
Question : 8 [IAS 2017]
Which of the following statements is/are correct regarding the Monetary Policy Committee (MPC)?
- It decides the RBI’s benchmark interest rates.
- It is a 12-member body including the Governor of RBI and is reconstituted every year.
- It functions under the chairmanship of the Union Finance Minister.
a) 3 only
b) 1 and 2 only
c) 1 only
d) 2 and 3 only
Answer »Answer: (c)
MPC has 6 members, not 12; and it’s headed by the RBI governor and not Finance Minister.
So statements 2 and 3 are wrong, hence by elimination, we reach answer (a) only 1 correct.
Question : 9
The one rupee note bears the signature of the
a) Finance Minister
b) Governor, RBI
c) Secretary, Ministry of Finance
d) None of these
Answer »Answer: (c)
The one rupee note is issued by the Ministry of Finance and it bears the signature of the Finance Secretary, while other notes bear the signature of Governor RBI.
However, only RBI is the only source of legal tender money because the distribution of one rupee notes and coins and small coins all over the country is undertaken by the Reserve Bank as an agent of the Government.
Question : 10
According to the Reserve Bank of India’s guidelines to banks, customers can change up to 20 pieces of soiled currency notes over the counter, free of charge up to a maximum value of
a) Rs.25,000
b) Rs.5,000
c) Rs.28,000
d) Rs.15,000
Answer »Answer: (b)
According to the RBI’s guidelines to banks, a person can change up to 20 pieces of notes with a maximum value of Rs.5000 per day, banks should exchange them over the counter, free of charge.
IMPORTANT indian economy mcq EXERCISES
Banking, Security Market & Insurance Shortcuts »
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indian economy MCQ CATEGORIES
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» Introduction to Indian Economy
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» Planning, Economic Development & Five year Plans
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» National Income & Human Development Index
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» Agriculture Sector, Subsidy and Food Processing
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» Industries, Manufacturing & Service Sectors
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» Inclusive growth, Sustainable development and employment
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» Poverty & Unemployment
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» Introduction to Micro Economics
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» Introduction to Macro Economics
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» Macro fundamentals, GDP, Investment, Growth
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» Demand & Supply, Profit Loss, Inflation & Price Index
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» Fiscal Policy, Public Finance and Monetary Policy
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» Money Supply, Banking and Financial Institutions
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» Taxes Types, Methods & Budgeting Process
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» Banking, Security Market & Insurance
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