money supply, banking & financial institutions section 6 Practice Questions Answers Test with Solutions & More Shortcuts

Question : 1 [HPPSC (Pre) 2016]

The question of full capital account convertibility of Indian was explained by the committee known as

a) Rangarajan Committee

b) Hashim Committee

c) Tarapore Committee II

d) Vaghul Committee

Answer: (c)

Question : 2

Who has the authority to issue currency notes in India?

a) Ministry of Finance

b) RBI

c) Central Government

d) RBI governor

Answer: (b)

The RBI Act of 1934, Section 22 gives the central bank the sole right to issue currency notes.

Question : 3 [HPPSC (Pre) 2016]

Study the following statements with regard to Reserve Bank of India and select your answer from the codes given below.

  1. It is the Apex Bank.
  2. It regulates the money supply.
  3. It gives loan to the business houses.
  4. It supervises the operations of NABARD.
Code

a) 2 and 4

b) 1, 2 and 4

c) 1, 2 and 3

d) 1 and 2

Answer: (d)

Question : 4 [UPPCS (Pre) 2003]

Which one of the following statements about foreign exchange reserves of India is not true?

a) It is maintained with the Reserve Bank of India

b) Presently foreign exchange situation is satisfactory in India

c) Special drawing rights are not included in it

d) It includes foreign currency assets and gold holdings of Reserve Bank of India

Answer: (c)

Question : 5

The Government is planning merger of public sector banks. It will benefit in which of the following ways:

  1. Reducing cost and achieving efficiency
  2. Achieving economies of scale
  3. Leading to consolidation
  4. The merged entity will have less NPA as compared to the individuals
Select the correct answer using the code given below:

a) (i), (ii) & (iii) only

b) (ii), (iii) & (iv)

c) (i) & (ii) only

d) All of the above

Answer: (a)

The government is merging public sector banks to make them more efficient and achieve economies of scale and consolidation.

Just merging banks will not reduce the absolute value of NPAs.

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