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

When the RBI makes open market operations by sale of securities the money supply in the banking system?

  1. Reduces

  2. Increases

  3. Is not affected at all

  4. Difficult to say anything
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Open market operation (OMO) is a monetary policy by the central bank in which the bank deals in the sale and purchase of securities in the open market to control the supply of money in the economy. By selling the securities, the central bank soaks liquidity from the economy which reduces the money supply in the economy. 

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

Which of the following measure is/are adopted for monetary policy in India?

  1. Quantitative Measures

  2. Qualitative Measures

  3. Both (A) and (B)

  4. Neither (A) nor (B)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Monetary policy measures are broadly classified into quantitative measures (like CRR, SLR, Repo) and qualitative measures (like credit rationing, moral suasion).

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

________ is the official minimum rate at which the Central Bank of a country is prepared to rediscount approved bill held by Commercial Banks.

  1. Repo rate

  2. Reverse repo rate

  3. Discount rate

  4. Bank rate
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Bank Rate is the official minimum rate at which the central bank is prepared to rediscount or buy bills of exchange or other commercial paper eligible for purchase under the Act.

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

Sale of Government Securities by RBI constitutes _________ of controlling Inflation.

  1. Monetary Measures

  2. Fiscal Measures

  3. Controlling Investments Method

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Open Market Operations, such as the sale of government securities by the RBI, are a key tool of monetary policy used to manage liquidity and control inflation.

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

Which of these are functions of RBI?

  1. Issue of Currency

  2. Managing Public Debt

  3. Rediscounting Bills of Commercial Banks

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Reserve Bank of India (RBI) performs all these functions, including issuing currency, managing public debt for the government, and acting as a banker to banks by rediscounting commercial bills.