money supply, banking & financial institutions section 1 Practice Questions Answers Test with Solutions & More Shortcuts

Question : 11 [UPPCS (Mains) 2007]

Which of the following systems of Note-issue is followed by RBI?

a) Minimum Reserve System

b) None of the above

c) Fixed Fiduciary System

d) Proportional Reserve System

Question : 12

Consider the following statements:

1. In Narrow Banking, Banks just accept deposits and provide loans.
2. In Narrow Banking, there is rarely Asset Liability Mismatch.

a) Only 2 is correct

b) Only 1 is correct

c) Both 1 and 2 are correct

d) None of them is correct

Question : 13

Which of the following statements are true regarding “Term Repo Operations”?

1. The interest rate is between reverse repo and repo rate
2. The interest rate is above the repo rate
3. The interest rate is generally fixed
4. The interest rate is generally variable

a) (i) & (iv) only

b) (ii) & (iii) only

c) (i) & (iii) only

d) (ii) & (iv) only

Question : 14 [SSC IT 2009]

Full convertibility of a rupeee means

a) repayment of loans in terms of rupees

b) determination of rate of exchange between rupee and foreign currencies freely by the market forces of demand and supply

c) purchase of foreign exchange for rupees freely

d) payment for imports in terms of ruppes

Question : 15 [UPSC (Pre) 2010]

Consider the following statements. The function of commercial banks in India includes

1. Purchase and sale of shares and securities on behalf of customers.
2. Acting as executors and trustees of wills.

a) Only 2

b) Neither 1 nor 2

c) Both 1 and 2

d) Only 1