Money Supply, Banking & Financial Institutions Section 2 Practice Questions Answers Test With Solutions & More Shortcuts

Question : 36

If new currency is being issued, then who has the authority to decide its "Denomination":

a) RBI Central Board of Directors

b) Central Government

c) RBI Governor

d) Monetary Policy Committee

Question : 37 [UPPCS (Mains) 2010]

The decimal system was made applicable to Indian currency system in which year?

a) 1957

b) 1949

c) 1935

d) 1947

Question : 38

Which of the following statements is true regarding “Line of Credit”:

a) It is issued mainly in case of international transactions

b) It is a preset amount of money that a bank has agreed to lend

c) It is issued by one bank to another

d) The company will have to pay interest on the amount for which line of credit has been issued

Question : 39 [UPPCS (Mains) 2008]

The sum of which of the following constitutes Broad Money in India?

1. Currency with public
2. Demand deposits with banks
3. Time deposits with banks
4. Other deposits with RBI

a) 1, 2 and 3

b) 1, 2 and 4

c) 1, 2, 3 and 4

d) 1 and 2

Question : 40 [UPSC (Pre) 2010]

Why is the offering of ‘teaser loans’ by commercial banks is a cause of economic concern?

1. The ‘teaser loans’ are considered to be an aspect of sub-prime lending and banks may be exposed to the risk of defaulters in future.
2. In India, the ‘teaser loans’ are mostly given to entrepreneurs to set-up manufacturing or export units.

a) Only 2

b) Neither 1 nor 2

c) Both 1 and 2

d) Only 1