Tag: economics

Quizzes (361) Questions (3598)

Questions Related to economics

Multiple choice instruments of monetary policy and the reserve bank of india money and banking economics

In respect of "Door Step Banking", RBI has issued directives under the provisions of _______.

  1. reserve bank of India act, 1934

  2. negotiable instruments act, 1881

  3. banking regulation act, 1949

  4. shops and establishments act
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

 In a bid to facilitate seamless banking for all sections of the society, the Reserve Bank of India directed all banks to implement doorstep banking facilities for differently-abled citizens and those above 70 years of age by December this year under Section 23 of the Banking Regulation Act, 1949.

Multiple choice instruments of monetary policy and the reserve bank of india money and banking economics

If a cheque presented to the clearinghouse is returned unpaid for any reason, the banker has to enclose the cheque to a Returning Memo while returning the instrument to the customer. This provision has been prescribed under which of the following?

  1. Negotiable Instruments Act, 1881

  2. Reserve Bank of India Act, 1934

  3. Banking Regulation Act, 1949

  4. RBI Clearing House, Rules
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

According to the Reserve Bank of India Clearing House, Rules which list the basic guidelines for clearing all types of dues of the clearing house, if any cheque presented to the clearinghouse is returned unpaid for any reason, the banker has to enclose the cheque to a Returning Memo which  records all such transactions when he returns the instrument to the account holder or the customer. 

Multiple choice instruments of monetary policy and the reserve bank of india money and banking economics

Loans against Shares/Debentures can be sanctioned against the security of ________.

  1. preference share and convertible debentures

  2. fully paid equity shares and debentures in demat form

  3. all shares and debentures in physical form

  4. only preference share and partly paid debentures
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The loans taken for the purchase of shares and debentures of any company can be sanctioned by any bank against a collateral security of some fully paid equity shares and debentures of some other company in demat form i.e. non materialistic form. 

Multiple choice instruments of monetary policy and the reserve bank of india money and banking economics

Match the items of List-I with those in List-II and select the correct answer.

List-I List-II
(a) Bank Rate Policy 1. Involving the shortening of the currency of bills eligible for rediscount
(b) Credit Rationing 2. Involving the Purchase and sale of securities in the open market
(c) Variable Reserve System 3. Involving the alteration of discount rate
(d) Open Market Operations 4. Involving the variation of the minimum reserves
  1. $(a) - 1, (b) - 4, (c) - 2, (d) - 3$
  2. $(a) - 2, (b) - 1, (c) - 3, (d) - 4$
  3. $(a) - 4, (b) - 2, (c) - 1, (d) - 3$
  4. $(a) - 3, (b) - 1, (c) - 4, (d) - 2$
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Bank Rate Policy involves altering the discount rate (a-3). Credit Rationing involves shortening the currency of bills (b-1). Variable Reserve System involves varying minimum reserves (c-4). Open Market Operations involve buying/selling securities (d-2).

Multiple choice instruments of monetary policy and the reserve bank of india money and banking economics

In order to encourage investment in the country, the RBI may ____________.

  1. reduce CRR

  2. increase CRR

  3. sell securities in the open market

  4. increase bank rate
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In order to encourage investment in the country, the RBI may reduce CRR. Reduction in CRR will increase the lending capacity of the banks, leading to higher credit creation which will encourage investment.

Multiple choice instruments of monetary policy and the reserve bank of india money and banking economics

In order to control credit and investment, the Central Bank of a country should _____________.

  1. Sell securities in the open market and hike the Cash Reserve Ratio.

  2. Buy securities from the open market and lower the Cash Reserve Ratio.

  3. Buy securities from the open market and hike the Cash Reserve Ratio.

  4. Sell securities in the open market and lower the Cash Reserve Ratio.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

To control credit and investment, the Central Bank needs to reduce liquidity. Selling securities drains cash from the system, and hiking the Cash Reserve Ratio (CRR) forces banks to hold more idle reserves, thereby restricting lending capacity.

Multiple choice instruments of monetary policy and the reserve bank of india money and banking economics

In order to control credit in the country, the RBI may _________________.

  1. buy securities in the open market

  2. sell securities in the open market

  3. reduce CRR

  4. reduce bank rate
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

In order to control credit in the country, the RBI may sell securities in the open market, other options will be useful when expansion of credit is undertaken.

Multiple choice instruments of monetary policy and the reserve bank of india money and banking economics

Bonds or debentures issued by Securitization company should bear interest not less than ______.

  1. Bank Rate

  2. Prime Lending Rate

  3. 1.5% over the Bank Rate

  4. 1.5% over the Saving Rate
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Securitization companies issue security receipts or bonds to investors. Regulations typically mandate a minimum interest rate to ensure attractiveness and fairness, which is set at 1.5% above the Bank Rate.

Multiple choice instruments of monetary policy and the reserve bank of india money and banking economics

In India, the Commercial Banks are given license of operation by _________.

  1. The Government of India

  2. The Ministry of Finance

  3. Reserve Bank of India

  4. Banking Companies Regulation Act. 1949
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A commercial bank is that financial institution which  accepts deposit from people and offers loan for the purpose of consumption or investment. In India, the commercial banks are given license of operation by the Reserve bank of India which is an apex bank that controls the entire banking system of India.