money supply, banking & financial institutions section 1 Practice Questions Answers Test with Solutions & More Shortcuts
Money Supply, Banking and Financial Institutions PRACTICE TEST [12 - EXERCISES]
money supply, banking & financial institutions section 1
money supply, banking & financial institutions section 2
money supply, banking & financial institutions section 3
money supply, banking & financial institutions section 4
money supply, banking & financial institutions section 5
money supply, banking & financial institutions section 6
money supply, banking & financial institutions section 7
money supply, banking & financial institutions section 8
money supply, banking & financial institutions section 9
money supply, banking & financial institutions section 10
money supply, banking & financial institutions section 11
money supply, banking & financial institutions section 12
Question : 48
Which of the following will deter investments in the economy?
- High real interest rate
- High capacity utilization
a) (ii) only
b) Both (i) & (ii)
c) (i) only
d) Neither (i) nor (ii)
Answer »Answer: (c)
Investments depend essentially on the real interest rates. It is the difference in the lending rate and inflation. For businessmen, it is this cost i.e. the real interest rate which matters. If it is high, businessmen will not borrow and invest.
For example, if inflation is 6% and the lending rate is 10%, then the real interest rate for businessmen is 4%. For businessmen, it is the real interest rate of 4% that matters. If the real interest is high then it deters investment.
If in the economy, capacity utilization is high that means factories are running at full utilization and then the businessmen plan for an increase in capacity so that in future they are able to supply the goods and services in case there is an increase in demand.
But, if the existing capacity is not fully utilized, then businessmen defer new investments.
Question : 49 [SSC CAPFs 2014]
Which term is not related to banking ?
a) S.L.R.
b) Fixed Deposits
c) C.R.R.
d) N.E.E.R.
Answer »Answer: (d)
NEER stands for Nominal Effective Exchange Rate which represents the relative value of a home country’s currency compared to the other major currencies being traded (U.S. dollar, Japanese yen, euro, etc.). It also represents the approximate relative price a consumer will pay for an imported good.
Question : 50 [SSC CML 2006]
If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should
a) sell government securities
b) All of the above
c) lower cash reserve ratio
d) raise discount rates
Answer »Answer: (c)
When the Central Bank of a country intends to increase the money supply, it should lower the Cash Reserve Ratio. A decrease in CRR helps the commercial banks to hold a lesser proportion of their deposits in the form of deposits with the RBI.
This increases the number of Bank deposits and they will lend more as they have more amount as their reserve
IMPORTANT indian economy mcq EXERCISES
-
500+ Banking & Money Supply GK MCQ Quiz PDF For IBPS Exam »
-
Top 500+ Indian Financial System GK MCQ Live Quiz For SSC »
-
Top 500+ Money Supply & Banking Functions GK MCQ Quiz PDF »
-
New Banking & Financial Institutions GK MCQ Quiz For RRB »
-
Top 500+ Money Supply Methods & Concepts GK MCQ For UPSC »
-
Banking & Financial Institutions Features GK MCQ Quiz PDF »
-
New 500+ Money Supply Concepts Types Formulas GK MCQ Quiz »
-
499+ Indian Monetary Aggregates & Money Supply GK MCQ PDF »
-
Top 500+ Money & Banking Questions And Answers Test PDF »
-
New Banking & Money Supply Questions And Answers Test PDF »
-
Top 500+ Money Supply Trends & Developments MCQ For IBPS »
-
Top 500+ Banking & Financial Institutions GK MCQ Test PDF »
Money Supply, Banking and Financial Institutions Shortcuts »
Click to Read...money supply, banking & financial institutions section 1 Online Quiz
Click to Start..Money Supply, Banking and Financial Institutions Shortcuts and Techniques with Examples
indian economy MCQ CATEGORIES
-
» Introduction to Indian Economy
-
» Planning, Economic Development & Five year Plans
-
» National Income & Human Development Index
-
» Agriculture Sector, Subsidy and Food Processing
-
» Industries, Manufacturing & Service Sectors
-
» Inclusive growth, Sustainable development and employment
-
» Poverty & Unemployment
-
» Introduction to Micro Economics
-
» Introduction to Macro Economics
-
» Macro fundamentals, GDP, Investment, Growth
-
» Demand & Supply, Profit Loss, Inflation & Price Index
-
» Fiscal Policy, Public Finance and Monetary Policy
-
» Money Supply, Banking and Financial Institutions
-
» Taxes Types, Methods & Budgeting Process
-
» Banking, Security Market & Insurance
RECENT BLOGS
Recently Added Subject & Categories For All Competitive Exams
New 100+ Compound Interest MCQ with Answers PDF for IBPS
Compound Interest verbal ability questions and answers solutions with PDF for IBPS RRB PO. Aptitude Objective MCQ Practice Exercises all competitive exams
Continue Reading »
100+ Mixture and Alligation MCQ Questions PDF for IBPS
Most importantly Mixture and Alligation multiple choice questions and answers with PDF for IBPS RRB PO. Aptitude MCQ Practice Exercises all Bank Exams
Continue Reading »
IBPS Profit and Loss Questions Solved Problems with PDF
Most important Profit and Loss multiple choice questions and answers with PDF for IBPS RRB PO. 100+ Aptitude MCQ Practice Exercises all competitive exams
Continue Reading »
100+ Average Aptitude Questions Answers solutions MCQ PDF
New Average multiple choice questions and answers with PDF for IBPS RRB PO. 100+ Quantitative Aptitude MCQ Practice Exercises all competitive exams
Continue Reading »