money supply, banking & financial institutions section 4 Practice Questions Answers Test with Solutions & More Shortcuts

Question : 6

Consider the following statements:

1. not all banks come under the regulation of the Right to Information Act
2. not all banks come under Schedule 2 of RBI

a) Only 2 is correct

b) Only 1 is correct

c) Both 1 and 2 are correct

d) Neither 1 nor 2 is correct

Question : 7 [PSC (Pre) 2017]

When the exchange rate changes from 1 $ = 60 to 1 $ = 58, it means

1. Rupee value has appreciated
2. Dollar value has depreciated
3. Rupee value has depreciated
4. Dollar value has appreciated

a) 2 and 3 are correct

b) 2 and 4 are correct

c) 1 and 4 are correct

d) 1 and 2 are correct

Question : 8

When the Reserve Bank of India reduces the Statutory Liquidity Ratio by 50 basis points, which of the following is likely to happen?

a) Foreign Institutional Investors may bring more capital into our country

b) India’s GDP growth rate increases drastically

c) Scheduled Commercial Banks may cut their lending rates

d) It may drastically reduce the liquidity to the banking system

Question : 9

If an economy is in “Liquidity Trap”, then which of the following statements shall be true:

1. The interest rate in the market will be very low/zero
2. People and businesses both will hold on to their cash and don’t spend
3. People will be willing to spend
4. Demand Deposits of banks increases

a) (ii) & (iv) only

b) (i), (ii) & (iv) only

c) (i) only

d) (i) & (iv) only

Question : 10

What does venture capital mean?

a) A short-term capital provided to industries

b) Funds provided to industries at times of incurring losses

c) A long-term start-up capital provided to new entrepreneurs

d) Funds provided for replacement and renovation of industries