Introduction To Indian Economy Section 9 Practice Questions Answers Test With Solutions & More Shortcuts

Answer: (d)

Since 1957, the Reserve Bank of India is required to maintain gold and foreign exchange reserves of Rs.200 crore, of which at least Rs.115 crore should be in gold and Rs.85 crore in the form of Government Securities. The system as it exists today is known as the minimum reserve system.

Answer: (b)

The rate at which RBI gives short term loans to commercial banks against securities is known as the Repo rate. A reduction in the repo rate helps banks to get money at a cheaper rate.

When the repo rate increases, borrowing from the central bank becomes more expensive. In contrast, the reverse repo rate is the rate at which banks can park surplus funds with RBI.

Answer: (c)

In India a large number of farmers are illiterate and know little about scientific agriculture, prices of primary products are lower than those of manufactured products and Investment in agriculture has been lower when compared to investment in the industry.

All these reasons are responsible for lower rural income.

Answer: (a)

In terms of Section 22 of the Reserve Bank of India Act, the RBI has been given the statutory function of note issue on a monopoly basis. The note issue in India was originally based upon the “Proportional Reserve System”.

The Government of India issues rupee coins in the denomination of Rs.1, 2, and 5 to the public. These coins are required to be circulated to the public only through the Reserve Bank under Section 38 of the RBI Act.

Answer: (a)

The Swarna Jayanti Swarozgar Yojana (SGSY) has been renamed as National Rural Livelihood Mission (NRLM).

NRLM is a poverty alleviation project implemented by the Ministry of Rural Development, Government of India. This scheme is focused on promoting self-employment and the organization of rural poor.