Eco MCQ 4 - Multiple Choice Questions (MCQ) for Economics 1 BALLB/BBALLB PDF

Preview

Summary

Multiple Choice Questions (MCQ) for Economics 1 BALLB/BBALLB...

Description

MCQ (UNIT IV) ECONOMICS I

1. What happens when CRR is increased? a. b. c. d.

It decreases money supply It increases demand for money It decreases inflation All of the above

Ans d 2). What do we call the rate at which the Reserve Bank of India lends money to commercial banks? a. Repo rate b. Reverse repo rate c. CRR d. SLR ans a 4). Who is the chairperson of the Monetary Policy committee of India? a. Finance Minister b. Prime Minister c. RBI Governor d. Chief Economic Advisor ans c 5). What do we call the instruments of monetary policy which directly affect the quantity of money supply? a. Quantitative instruments b. Qualitative instruments c. Money instruments d. None of the above ans a 6). Which of these is a quantitative instrument of Monetary Policy? a. Repo rate b. CRR c. SLR d. All of the above ans d

7). What do we call the funds that the banks keep with RBI as part of their legal reserve ratio? a. Statutory Liquidity Ratio b. Cash Reserve Ratio c. Bank Rate d. Reverse Repo Rate ans b 8). What is meant by Open Market Operations? a. b. c. d.

Purchase and sale of the Government Securities by RBI Rationing of the credit allocated by commercial banks by RBI Request by the RBI to the commercial banks to take certain measures None of the above

Ans a 9). What do we call the official interest rate at which RBI provides loans to the banking system? a. Reverse repo rate b. Bank rate c. SLR d. CRR ans b 10

Which of these banks is regulated by Reserve bank of India? (Marks: 1) a. b. c. d.

Local Area Banks Cooperative Banks Commercial Banks All of the above

ans d What are the necessary conditions of Barter System ? 11. (a) Limited Needs (b) Limited Exchange Area (c) Economically Backward Society (d) All the above Answer Answer: (d) All the above

12. Which one is the difficulty of Barter System ? (a) Lack of Double Coincidence (b) Difficulty of Division of the Goods (c) Lack of General Acceptable Measure of Value (d) All the above Answer d

13. Which is the correct order of money evolution ? (a) Commodity Money, Paper Money, Metal Money (b) Commodity Money, Metal Money, Paper Money, Credit Money (c) Credit Money, Metal Money, Paper Money (d) None of the above Answer b

14. “Money is what money does.” Who said it ? (a) Hartley Withers (b) Hawtrey (c) Thomas (d) Keynes Answer a

15. Which one is included in the primary function of money ? (a) Medium of Exchange (b) Measure of Value (c) Both (a) and (b) (d) Store of Value Answer c

16. Which one is included in the secondary function of money ? (a) To make Deferred Payments (b) Store of Value (c) Transfer of Value (d) All of these Answer d

17. By supply of money we mean : (a) Money deposited in bank (b) Money available with the public (c) Deposits with post office savings bank (d) All of these Answer d

18. Which of the following is not a function of money ? (a) Medium of exchange (b) Price stability (c) Store of value (d) Unit of account Answer b

19. Which one is the Bank of the Public ? (a) Commercial Bank (b) Central Bank (c) Both (a) and (b) (d) None of the above

Answer a

20. The primary function of Commercial Bank is ? (a) Accepting Deposits (b) Advancing Loans (c) Credit Creation (d) All of these Answer d

21. Deposits accepted by the Commercial Banks: (a) Current Deposits (b) Saving Deposits (c) Time Deposits (d) All of these Answer d

22. What type of loan is advanced by Commercial Banks ? (a) Cash Credit (b) Overdraft (c) Loan and Advance (d) All of these Answer d

23. Which function is the Secondary Function of Commercial Banks ? (a) Agency Function (b) General Utility Function (c) Social Function (d) All of these

Answer d

24. Which is the Agency Function of Commercial Banks ? (a) Advancing Loans (b) Accepting Deposits (c) Act as Trustee (d) Locker Facility Answer c

25. Credit Multiplier is: (a) 1/CRR (b) cash×1 CRR (c) Cash x CRR (d) None of these Answer a

26. Credit money is increased when CRR: (a) Falls (b) Rises (c) Both (a) and (b) (d) None of these Answer a

27. The full form of ATM is: (a) Any Time Money (b) All Time Money (c) Automated Teller Machine (d) Both (a) and (b) Answer c

28. Commercial banks: (a) Issue currency notes (b) Accepts deposits from customers (c) Provide loans to customers (d) Only (b) and (c) Answer d

29. Central Bank of India is : (a) Reserve Bank of India (b) State Bank of India (c) Central Bank of India (d) Bank of India Answer a

30. Which of the following is the function of Central Bank ? (a) Monopoly of Note Issue (b) Banker of the Government (c) Custodian of Foreign Exchange Reserves (d) All the above Answer d

31. Which one is true ? (a) Bank rate is an rate at which Central Bank is ready to give credit to commercial banks

(b) Bank rate and interest rates are different (c) Bank rate is the discount rate of the Central Bank (d) All the above Answer d

32. Which is not a quantitative method of credit control ? (a) Bank Rate (b) Moral Suasion (c) Open Market Operations (d) Change in CRR Answer b

33. Reserve Bank of India was established in : (a) 1947 (b) 1935 (c) 1937 (d) 1945 Answer b

34. _________ is the organisations, institutions that provide long term funds. (a) Capital market (b) Money market (c) Primary market (d) Secondary market

Ans a

35. Stock exchange is known as __________ market for securities. (a) Primary market (b) Secondary market

(c) Capital market (d) None of the above Ans b

_________ is a market for lending & borrowing of short term funds. 36. (a) Money market (b) Primary market (c) Capital market (d) All of the above Ans a

37. Which of the following are the instruments of money market? (a) Call money (b) Certificate of deposits (c) Trade bills (d) All of the above Ans d

38. _______ is a link between savers & borrowers, helps to establish a link between savers & investors (a) Marketing (b) Financial market (c) Money market (d) None of these Ans b 39.

Commercial paper cm be issued

a) by all corporates b) by all corporates with net worth of atleast Rs. 10 crore c) can be issued only by banks d) All of the above ans d

40.

Government securities with terms of more than 1 year are called

a) Government bonds b) treasury bills c) bills of exchange d) capital bills Ans a

41. Which of the following is not a money market instrument? A) Treasury Bills B) Commercial Paper C) Certificate of Deposit D) Equity Share Ans d

42. Narrow measure of money supply is

a. M1

b. M2

c. Both a and b

d. M3

Ans c

43. Which is not part of Keynes component of money demand

a. Transaction demand for money

b. Commodity demand for money

c. Transaction demand for money

d. Speculative demand for money

Ans b

44. Which of the following is true regarding NBFC? a. b. c. d.

NBFC provides banking services to people without holding bank license NBFC can accept demand deposits NBFC is a part of payment and settlement NBFC can issue checks drawn on itself

Ans a 45. Which of the following is the principle business carried out by NBFC? (Marks: 0) a. b. c. d. Ans d

Hire purchasing finance Housing finance Investment and loan All of the above

46. Which of the following is non legal tender money

a. Rupees 100

b. Rupees 1000

c. Rupees 2000

d. Rupees 200

Ans b

47. RBI acts as

a. Lender of last resort

b. Banker to government

c. Banker to bank

d. All of the above

Ans d

48. Accepting public deposits is function of

a. Central Bank

b. Commercial bank

c. Non banking financial institutions

d. All of the above

Ans b

49. Example of plastic money is

a. Credit card

b. Gift vouchers

c. Cash in hand

d. Demand deposits

Ans a

50. Which is the broad measure of money supply

a. M3

b. M1

c. M2

d. M4

Ans d...