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 : 6
Which of the following could create a hindrance in achieving the objective of inflation targeting by RBI?
- Government deviating from the fiscal road map
- Impediments in monetary policy transmission
- Supply-side bottlenecks
a) (i) & (ii) only
b) (ii) & (iii)
c) (i) only
d) All of the above
Answer »Answer: (d)
When government deviates from the fiscal deficit target and spends more, it results in higher inflation. So even if RBI is trying to bring down the inflation, deviation in the fiscal deficit target will create issues in RBI achieving the inflation target.
To target inflation, RBI changes the repo rate which ultimately increases/decreases the interest rate, resulting in a change in the money supply. Through a change in money supply, RBI tries to achieve its inflation target. So, hindrances in monetary policy transmission may create issues in RBI achieving the inflation target.
In case of supply-side challenges like drought, floods or governance issues, just reducing the money supply may not result in bringing down the prices of commodities.
Question : 7
Which of the following operations by RBI will help in ‘monetary transmission’?
- Forex Swap
- Sale of Government bonds by RBI
- Operation Twist
- Long Term Repo Operation (LTRO)
a) (i) & (ii) only
b) (i), (iii) & (iv) only
c) (ii) only
d) All of the above
Answer »Answer: (d)
Monetary transmission is the pass-through of RBI’s monetary policy decisions to the economy at large in terms of interest rates, asset prices, or other economic parameters etc. And monetary transmission may result in any direction i.e. interest rates or asset prices moving up or down.
Question : 8
Consider the following statements regarding the resolution of Financial Service Providers (FSP) under IBC 2016.
- Govt. of India in consultation with the appropriate regulator will decide which category of FSPs can be taken up for resolution under IBC 2016
- To initiate resolution of FSPs under IBC 2016, the appropriate regulator should make an application
a) (ii) only
b) Both (i) & (ii)
c) (i) only
d) Neither (i) nor (ii)
Answer »Answer: (b)
Section 227 of IBC 2016 says that "Notwithstanding anything to the contrary examined in this Code or any other law for the time being in force, the Central Government may, if it considers necessary, in consultation with the appropriate financial sector regulators, notify financial service providers or categories of financial service providers for the purpose of their insolvency and liquidation proceedings, which may be conducted under this Code.”
And the rules also say that to initiate resolution of FSPs under IBC 2016, the appropriate regulator should make an application. This is not applicable in other cases wherein the case of default, either the creditor or the debtor (company), anyone can move for resolution under IBC 2016.
Since section 227 got notified, the Ministry of Corporate Affairs (GoI) (using the powers under section 227) consulted the regulator (RBI) and said that those NBFCs with asset size of more than Rs. 500 crores can be brought under the IBC code for resolution.
This has been done only for those NBFCs which are regulated by RBI and not for those NBFCs which are regulated by other regulatory bodies like SEBI, IRDAI etc.
Question : 9
Consider the following statements:
- Disinflation is declining rate of inflation but the rate of inflation remains positive
- Deflation is general decrease in price level and the inflation rate is negative
a) (ii) only
b) Both (i) & (ii)
c) (i) only
d) Neither (i) nor (ii)
Answer »Answer: (b)
Question : 10
Which of the following situation may lead to depreciation of a country's currency with respect to another country:
a) Rise in the interest rate
b) Increase in exports
c) Foreign Investment inflow
d) None of the above
Answer »Answer: (d)
When foreign investors come to India, they bring dollars and this dollar they sell in forex market and demand rupees which results in increase in demand of rupee and rupee appreciates.
When exports increase, we earn more dollars from the foreign market and this dollar we sell in the forex market to purchase rupees which results in increase in demand of rupees and rupee appreciates.
When the interest rate in India increases, more foreign investors come to India to invest in fixed interest rate instruments, which results in rupee appreciation.
So, none of the statements are true.
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 »