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

Question : 46

Other things being equal, what would be the impact of an increase in net capital inflow on the Indian currency?

a) There would be an increase in the demand for the American dollar and an appreciation of the currency.

b) There would be an increase in the supply of the American dollar and an appreciation of the currency.

c) There would be a decrease in the demand for the rupees (`) and a depreciation of the currency.

d) There would be a decrease in the supply of the American dollar and a depreciation of the currency.

Question : 47

Which one of the following is not a feature of “Value Added Tax” ?

a) It is multi-point destination-based system of taxation.

b) It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer.

c) It is a tax levied on value addition at each stage of transaction in the production distribution chain.

d) It is basically a subject of the central government and the state governments are only a facilitator for its successful implementation.

Question : 48

Which among the following is true about “deficit financing”?

a) Public expenditure in excess of public revenue

b) New currency replaced by old currency

c) Public revenue in excess of public expenditure

d) None of above

Question : 49

Which among the following are the ‘Credit-Rating Agencies’ of India?

1. CRISIL
2. CARE
3. ICRA
4. ONICRA

a) 1, 2 and 3

b) 1 and 3

c) 1, 3 and 4

d) All of them

Question : 50 [SSC SO 2005]

A commercial bank law creates credit only if it has

a) Permission of Reserve Bank of India

b) Cooperation of other banks

c) Cash in the vault

d) Excess reserves