money supply, banking & financial institutions section 7 Practice Questions Answers Test with Solutions & More Shortcuts
Money Supply, Banking and Financial Institutions PRACTICE TEST [12 - EXERCISES]
money supply, banking & financial institutions section 1
money supply, banking & financial institutions section 2
money supply, banking & financial institutions section 3
money supply, banking & financial institutions section 4
money supply, banking & financial institutions section 5
money supply, banking & financial institutions section 6
money supply, banking & financial institutions section 7
money supply, banking & financial institutions section 8
money supply, banking & financial institutions section 9
money supply, banking & financial institutions section 10
money supply, banking & financial institutions section 11
money supply, banking & financial institutions section 12
Question : 21 [SSC CGL 2016]
Money market is a market for
a) Negotiable instruments
b) Sale of shares
c) Short term fund
d) Long term fund
Answer »Answer: (c)
The money market is where financial instruments with high liquidity and very short maturities are traded.
It is used by participants as a means for borrowing and lending in the short term, with maturities that usually range from overnight to just under a year.
Some of the common money market instruments are:
- commercial paper,
- municipal notes,
- interest rate swaps, etc.
Question : 22
RBI changed its monetary policy stance from accommodative to neutral. Which of the following could be the probable reasons?
- Inflation is edging up in the economy
- Demand is firming up in the economy
- A decline in Consumer confidence
- RBI will have flexibility to move the policy rate in any direction
a) (ii) & (iv) only
b) (i), (ii) & (iv) only
c) (i) & (ii) only
d) All of the above
Answer »Answer: (b)
Accommodative Monetary Policy:
When a central bank attempts to expand the overall money supply to boost the economy when growth is slowing. This is done to encourage more spending from consumers and businesses by making money less expensive to borrow by lowering the interest rate.
A neutral monetary policy is also called the "natural" or "equilibrium" rate where the policy (repo) rate is such that neither it stimulates nor restrains economic growth.
Whenever RBI conducts its monetary policy review, it also tells the general public what will be its future stand (this is also called ‘Forward Guidance’) i.e. going forward, in which direction the policy rate may move. If it wants to move the repo rate down in future then it will keep an ‘accommodative stance’. If it expects to move the repo rate up in future then it will keep a ‘hawkish stance’. And if it wants that it should be able to move the repo rate in any direction then it keeps a ‘neutral stance’.
When RBI is changing its stance from "accommodative" to "neutral", in any monetary policy review, that means RBI is expecting that in future it may be required to change the repo (policy) rate in any direction.
When RBI is having an accommodative monetary policy stance that means in future it expects to lower the policy rate. But if it thinks that the inflation or demand in the economy is edging up then it may change its stance from accommodative to neutral so that it has the leeway to change the policy rate even in the upward direction (or maybe downward direction).
When consumer confidence in the economy is up it shows that in future the consumers will be willing to purchase more goods and services which may lead to an increase in inflation. But if consumer confidence is down then it implies that consumers will be spending less in future.
Question : 23
The definition of Wholesale Price Index (WPI) is as follows:
- The WPI is a weighted average of indices covering 676 commodities, which are traded in primary, manufacturing and fuel and power-sectors.
- It is the retail price average of a basket of goods and services directly consumed by the people.
a) 2 only
b) 1 only
c) 1 and 2
d) None of the Above
Answer »Answer: (b)
The Wholesale Price Index (WPI) is a weighted average of indices covering 676 commodities, which are traded in primary, manufacturing and fuel and power-sectors.
Question : 24
Consider the following statement:
- GIC was formed in November 1972.
- The 107 private companies operating in the field were grouped together into four - National Insurance Company, United India Insurance Company, Oriental Insurance Company and New India Assurance Company.
a) 2 only
b) 1 only
c) 1 and 2
d) None of the Above
Answer »Answer: (d)
The GIC was formed in November 1972 consequent upon the nationalisation of the general insurance business.
The 107 private companies operating in the field were grouped together into four - National Insurance Company, United India Insurance Company, Oriental Insurance Company and New India Assurance Company, with GIC as the holding company.
Question : 25 [UPSC (Pre) 1998]
Capital Account convertibility of Indian Rupee implies
a) that the Indian Rupee can be exchanged for any major currency for the purpose of trade in goods and services
b) None of the above
c) that the Indian Rupees can be exchanged for any the purpose of trading financial assets
d) that the Indian Rupee can be exchanged by the authorised dealer to travel
Answer »Answer: (c)
IMPORTANT indian economy mcq EXERCISES
-
500+ Banking & Money Supply GK MCQ Quiz PDF For IBPS Exam »
-
Top 500+ Indian Financial System GK MCQ Live Quiz For SSC »
-
Top 500+ Money Supply & Banking Functions GK MCQ Quiz PDF »
-
New Banking & Financial Institutions GK MCQ Quiz For RRB »
-
Top 500+ Money Supply Methods & Concepts GK MCQ For UPSC »
-
Banking & Financial Institutions Features GK MCQ Quiz PDF »
-
New 500+ Money Supply Concepts Types Formulas GK MCQ Quiz »
-
499+ Indian Monetary Aggregates & Money Supply GK MCQ PDF »
-
Top 500+ Money & Banking Questions And Answers Test PDF »
-
New Banking & Money Supply Questions And Answers Test PDF »
-
Top 500+ Money Supply Trends & Developments MCQ For IBPS »
-
Top 500+ Banking & Financial Institutions GK MCQ Test PDF »
Money Supply, Banking and Financial Institutions Shortcuts »
Click to Read...money supply, banking & financial institutions section 7 Online Quiz
Click to Start..Money Supply, Banking and Financial Institutions Shortcuts and Techniques with Examples
indian economy MCQ CATEGORIES
-
» Introduction to Indian Economy
-
» Planning, Economic Development & Five year Plans
-
» National Income & Human Development Index
-
» Agriculture Sector, Subsidy and Food Processing
-
» Industries, Manufacturing & Service Sectors
-
» Inclusive growth, Sustainable development and employment
-
» Poverty & Unemployment
-
» Introduction to Micro Economics
-
» Introduction to Macro Economics
-
» Macro fundamentals, GDP, Investment, Growth
-
» Demand & Supply, Profit Loss, Inflation & Price Index
-
» Fiscal Policy, Public Finance and Monetary Policy
-
» Money Supply, Banking and Financial Institutions
-
» Taxes Types, Methods & Budgeting Process
-
» Banking, Security Market & Insurance
RECENT BLOGS
Recently Added Subject & Categories For All Competitive Exams
SSC STENO: Speed Time and Distance MCQ Questions Test PDF
Free Time and Distance Aptitude-based Practice multiple questions with solutions, Quiz series, Mock Test & Download PDF for SSC Steno (Grade C & D) 2024 Exam
Continue Reading »
SSC STENO: Time & Work Questions Solved Problems with PDF
Free Time and work Aptitude-based Practice multiple questions with solutions, Quiz series, Mock Test & Downloadable PDF for SSC Steno (Grade C & D) 2024 Exam
Continue Reading »
SSC STENO 2024: Free Reading Comprehension MCQ Test PDF
Top Reading Comprehension English Section-wise multiple choice questions and answers, Full Mock Test Series & Online Quiz for SSC Steno Grade C & D 2024 Exam
Continue Reading »
Free Percentage Questions Answers for SSC STENO 2024 Exam
Important Top Percentage Aptitude-based multiple choice questions and answers practice quiz series, Online Mock Test PDF for SSC Steno Grade C & D 2024 Exam
Continue Reading »