1. Bank rate policy, open market operations, variable reserve requirements and
statutory liquidity requirements as measures of credit control are classified
as
(a) Quantative methods
(b) Qualitative methods
(c) Weighted average methods
(d) none
(e) both (a) and (b)
2. Which of the following fall under
the qualitative method of credit control adopted by RBI?
(a) Selective credit control
(b) Moral suasion
(c) Credit authorization scheme
(d) all
(e) none
3. In periods of boom, which leads
to economic instability RBI resorts to
(a) Sale first class securities in
its precession in the market, to reduce the supply of money as a measure of
open market operations
(b) buying of approved securities in
the market as a measure of open market operation
(c) like in the bank rate as is
measure of open market operations
(d) none
(e) all
4. Which among the following does
the RBI not decide?
(a) CAR
(b) CRR
(c) Base Rate
(d) Bank Rate
(e) None of these
5. Which among the following is an
instrument of monetary policy used by the RBI?
(a) Base Rate
(b) PLR
(c) CRR
(d) BPLR
(e) None of these
6. What does liquidity mean?
(a) It means how cash is converted
into gold
(b) It means how cheaply and quickly
an asset is converted into cash
(c) It means how cash is converted
into SDR (Special Drawing Rights)
(d) It means how uncertain the money
market conditions are
(e) None of these
7. What does the term Open Market
Operations refer to?
(a) Selling of equities in the open
market
(b) Selling of commodities in the
open market
(c) Buying and selling of government
securities in the open market
(d) Buying and selling of products
in the wholesale market
(e) None of these
8. RBI has introduced “Marginal
Standing Facility” with the objective of
(a) Controlling Inflation
(b) Containing instability in long
term inter-bank rates
(c) Containing instability in the
overnight inter-bank rates
(d) All of the above
(e) None of these
9. ______is the percentage of total
deposits of a bank which it has to keep with itself in the form of liquid
assets.
(a) Statutory Liquidity Ratio (SLR)
(b) Cash Reserve Ratio (CRR)
(c) Statutory Reserve Ratio
(d) Cash Ratio
(e) None of these
10. Often, we read in newspapers
that the RBI has changed the Repo rate and the Reverse Repo rate by a few basis
points. What is a basis point?
(a) Ten % of one hundredth point
(b) One hundredth of 1%
(c) One tenth of 1%
(d) Ten % of 100
(e) None of these
11. RBI isn’t expected to perform
the role of
(a) Acting as a clearing house
(b) Working as a banker to the
government
(c) Managing forex
(d) Accepting deposits from general
public
(e) None of these
12. When RBI sells government
securities, its result is that
(a) The liquidity in the banking
system increases
(b) The liquidity in the banking
system remains unchanged
(c) The liquidity in the banking
system gets diminished
(d) None of the above
(e) None of these
13. Which of the following is not an
instrument in the hands of the RBI to check inflation in our country?
(a) Open Market Operations (OMO)
(b) Special Drawing Rights
(c) Bank Rate (BR)
(d) Cash Reserve Ratio (CRR)
(e) None of these
14. LAF is an indirect instrument of
monetary policy, which is used by \RBI to regulate the liquidity in banking
system. ‘LAF’ stands for:
(a) Liquidity Adjustment Facility
(b) Liquidity Account Facility
(c) Liquidity Allotment Facility
(d) Long Adjustment Facility
(e) None of these
15. Bank rate is defined as the
(a) Rate of interest charged by
commercial banks from borrowers
(b) Rate of interest at which RBI
lends money to banks against government securities
(c) Rate of interest allowed by
commercial banks on their deposits
(d) Rate at which RBI purchases or
rediscounts bills of exchange of commercial banks
(e) None of these
Answer:
1. a
2. d
3. a
4. c
5. c
6. b
7. c
8. c
9. a
10. b
11. d
12. c
13. b
14. a
15. d
2. d
3. a
4. c
5. c
6. b
7. c
8. c
9. a
10. b
11. d
12. c
13. b
14. a
15. d
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