MCQOPTIONS
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MCQOPTIONS
This section includes 141 Mcqs, each offering curated multiple-choice questions to sharpen your Economics (CBCS) knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
The liabilities of a bank are |
| A. | Advance and loans |
| B. | Time deposits and shares |
| C. | Cash with reserve ratio |
| D. | Bonds and debentures of share holders |
| Answer» C. Cash with reserve ratio | |
| 2. |
Which of the following is true about the restrictions on RBI?(i) It is not to compete with the commercial banks.(ii) It is not allowed to pay interest on its deposits.(iii) It cannot engage directly or indirectly in trade.(iv) It cannot acquire or advice loans against immovable property.(v) It is prohibited from purchasing its own shares or the shares of any other bank or any company or granting loans on such security. |
| A. | only (i),(ii),(iii), and (iv |
| B. | only (v |
| C. | all the above |
| D. | none of the above |
| Answer» D. none of the above | |
| 3. |
For issuing / printing currency notes, the RBI has adopted a system |
| A. | Minimum Reserve System |
| B. | Fixed fiduciary system. |
| C. | Maximum limit system |
| D. | Proportional reserve system. |
| Answer» B. Fixed fiduciary system. | |
| 4. |
Central Bank is an institution which is |
| A. | Privately owned |
| B. | State owned |
| C. | Internationally owned |
| D. | Jointly owned by state and private. |
| Answer» C. Internationally owned | |
| 5. |
The methods of credit control used by RBI includes(i) Open market operation(ii) Changes in CRR and SLR(iii) Selective credit control(iv) Changes in SLR |
| A. | (i), (ii) and (iii |
| B. | (ii), (iii) and (iv |
| C. | (i), (iii) and (iv |
| D. | (i), (ii), (iii) and (iv |
| Answer» E. | |
| 6. |
The full form of EMI used in the banking sector is |
| A. | Easy Monthly Installment |
| B. | Equal Monthly Investment |
| C. | Equated Monthly Installment |
| D. | Equated Mortgage Investment. |
| Answer» D. Equated Mortgage Investment. | |
| 7. |
Bank rate is decided by |
| A. | Reserve Bank of India |
| B. | Govt. of India |
| C. | State Bank of India |
| D. | Securities and Exchange Board of India (SEBI |
| Answer» B. Govt. of India | |
| 8. |
Which function of foreign exchange market protects against the foreign exchange risk? |
| A. | Credit function |
| B. | Hedging function |
| C. | Transfer function |
| D. | All of them |
| Answer» C. Transfer function | |
| 9. |
Which of the following is not the work of RBI? |
| A. | Bank of the banks |
| B. | Credit controller |
| C. | Custodian of foreign currency |
| D. | Allocating funds directly to the farmers for agricultural development |
| Answer» E. | |
| 10. |
The reserves held by the Commercial Banks over and above the statutory minimum with the RBI are called |
| A. | Cash reserves |
| B. | Deposit reserves |
| C. | Excess reserves |
| D. | Momentary reserves. |
| Answer» D. Momentary reserves. | |
| 11. |
Central Bank is a |
| A. | Commercial Bank |
| B. | Exchange bank |
| C. | Apex bank. |
| D. | Scheduled bank. |
| Answer» D. Scheduled bank. | |
| 12. |
To control inflation and tackle the problem of exchange liquidity due to foreign exchange inflows, the RBI |
| A. | Sells government securities. |
| B. | Purchase securities |
| C. | Decrease bank rate. |
| D. | Raise interest rate. |
| Answer» B. Purchase securities | |
| 13. |
What will be the effect on exports if foreign exchange rate increases? |
| A. | Increases |
| B. | Decreases |
| C. | Remains constant |
| D. | None of them |
| Answer» B. Decreases | |
| 14. |
The statutory basis for administration of foreign exchange in India is |
| A. | Foreign Exchange Regulation Act, 1973 |
| B. | Conservation of foreign Exchange and Prevention of Smuggling Act. |
| C. | Foreign Exchange Management Act, 1999 |
| D. | Exchange Control Manual |
| Answer» D. Exchange Control Manual | |
| 15. |
The supply of foreign exchange comes from.. |
| A. | the foreigners purchasing home country's goods and services through exports |
| B. | the foreigners who invest in home country through joint ventures or through financial market operations |
| C. | currency dealers and speculators. |
| D. | all of them |
| Answer» E. | |
| 16. |
Foreign exchange is demanded by.. |
| A. | domestic residents to purchase goods and services from other countries |
| B. | sending gifts and grants to foreign countries (abroad |
| C. | the domestic residents to purchase financial assets in a particular country |
| D. | all of them |
| Answer» E. | |
| 17. |
Buyers and sellers of foreign exchange are |
| A. | central banks |
| B. | commercial banks |
| C. | brokers |
| D. | all of them |
| Answer» E. | |
| 18. |
The exchange rate at which demand for foreign currency becomes equal to its supply, is called |
| A. | equal rate of exchange |
| B. | mint parity |
| C. | equilibrium exchange rate |
| D. | all of these |
| Answer» D. all of these | |
| 19. |
The Industrial Credit and Investment Corporation of India (ICICI) was established as a private sector development bank at the initiative of the World Bank in |
| A. | 1954 |
| B. | 1955 |
| C. | 1956 |
| D. | 1957 |
| Answer» C. 1956 | |
| 20. |
In which of the following items raises the supply of foreign exchange ? |
| A. | Import of goods from China |
| B. | Indian students going to USA for MBA |
| C. | Donation of 50 million $ received from Microsoft |
| D. | Purchase of land in England |
| Answer» D. Purchase of land in England | |
| 21. |
Which one of the following institutions provide medium-term finance to industries? |
| A. | UTI |
| B. | LIC |
| C. | GIC |
| D. | Commercial Banks |
| Answer» B. LIC | |
| 22. |
With the government take-off of all the life insurance companies in India, the Life Insuarnce Corporation of India (LIC) was formed in |
| A. | 1953 |
| B. | 1954 |
| C. | 1955 |
| D. | 1956 |
| Answer» E. | |
| 23. |
The Export-Import Bank of India was set up by the Government of India on |
| A. | January 1,1980 |
| B. | January 1,1981 |
| C. | January 1,1982 |
| D. | January 1,1983 |
| Answer» D. January 1,1983 | |
| 24. |
ICICI is a |
| A. | Public sector institution |
| B. | Private sector institution |
| C. | Joint sector institution |
| D. | World Bank s institution |
| Answer» C. Joint sector institution | |
| 25. |
Among Mutual Funds Industry in India, the top and dominating position is held by |
| A. | QIC |
| B. | LIC |
| C. | IDBI |
| D. | UTI |
| Answer» E. | |
| 26. |
Venture Capital Fund provides |
| A. | long-term credit to industries |
| B. | short-term credit and medium-term credit to the farmers |
| C. | risk capital to little known, unregistered, young and small business |
| D. | All of the above |
| Answer» D. All of the above | |
| 27. |
Venture capital firm |
| A. | pools resources to help entrepreneur start new firm |
| B. | allows equity shares of the new firm to be sold in the market plan |
| C. | establishes joint venture companies |
| D. | Both (a) and (b |
| Answer» B. allows equity shares of the new firm to be sold in the market plan | |
| 28. |
Which was the first mutual fund established in India? |
| A. | SBI Mutual fund |
| B. | Unit Trust of India (1963 |
| C. | LIC Mutual Fund |
| D. | Venture Capital |
| Answer» C. LIC Mutual Fund | |
| 29. |
The IDBI at present is a |
| A. | subsidiary of RBI |
| B. | Subsidiary of IFC |
| C. | autonomous institution |
| D. | none of the above |
| Answer» B. Subsidiary of IFC | |
| 30. |
NBFIs refers to.. |
| A. | Non Banking Financial Industries |
| B. | Non Banking Financial Institutions |
| C. | Net Banking Financial Industries |
| D. | Net Banking Financial Institutions |
| Answer» C. Net Banking Financial Industries | |
| 31. |
Rupee is a coin |
| A. | Full Value |
| B. | Token money |
| C. | Credit money |
| D. | Convertible |
| Answer» C. Credit money | |
| 32. |
With reference to non-banking financial companies (NBFCs) in India, consider the following statements:1. They can offer any rate of interest subject to their financial capacity2. They can not accept deposits repayable on demand.Which of the statements given above is/are correct? |
| A. | 1 only |
| B. | 2 only |
| C. | Both 1 and 2 |
| D. | Neither 1 nor 2 |
| Answer» C. Both 1 and 2 | |
| 33. |
Which one among the following promoted the concept of self-help groups (SHGs) for financing the poor. |
| A. | RBI |
| B. | NABARD |
| C. | Union Ministry of Rural Development |
| D. | Union Ministry of Labour |
| Answer» C. Union Ministry of Rural Development | |
| 34. |
NABARD has been established on the recommendation of |
| A. | Talwar Committee |
| B. | Tandon Committee |
| C. | Narasimham Committee |
| D. | Shivaram Committee |
| Answer» E. | |
| 35. |
SIDBI was set up in 1990 as a wholly owned subsidiary of |
| A. | EXIM Bank |
| B. | RRBI |
| C. | IFCI |
| D. | IDBI |
| Answer» E. | |
| 36. |
Reduction in the value of domestic currency by the government is called |
| A. | depreciation |
| B. | devaluation |
| C. | revaluation |
| D. | appreciation |
| Answer» C. revaluation | |
| 37. |
Which one of the following is the main objectives of Unit Trust of India. |
| A. | To mobilize the saving of high income groups |
| B. | To mobilizes the saving of low and high income groups |
| C. | To mobilizes the saving of corporates |
| D. | To mobilizes the saving of low and middle income groups |
| Answer» C. To mobilizes the saving of corporates | |
| 38. |
Reduction in the value of domestic currency through market forces is called |
| A. | depreciation |
| B. | devaluation |
| C. | revaluation |
| D. | appreciation |
| Answer» B. devaluation | |
| 39. |
Increase in the value of domestic currency by the government is called |
| A. | depreciation |
| B. | devaluation |
| C. | revaluation |
| D. | appreciation |
| Answer» D. appreciation | |
| 40. |
Other things remaining the same, when in a country the market price of foreign currency falls, national income is likely |
| A. | to rise |
| B. | to fall |
| C. | to rise or to fall |
| D. | to remain unaffected |
| Answer» C. to rise or to fall | |
| 41. |
Devaluation which means fall in value of domestic currency in terms of foreign currency takes place in |
| A. | Flexible Exchange Rate regime |
| B. | Fixed Exchange Rate regime |
| C. | Both (a) and (b |
| D. | Neither |
| Answer» C. Both (a) and (b | |
| 42. |
Other things remaining the unchanged, when in a country the price of foreign currency rises, national income is: |
| A. | Likely to rise |
| B. | Likely to fall |
| C. | Likely to rise or to fall |
| D. | Not affected |
| Answer» B. Likely to fall | |
| 43. |
A change from Rs. 60 = 1 dollar to Rs 62 = dollars indicates that Rs has |
| A. | Appreciated |
| B. | Depreciated |
| C. | Neither |
| D. | Either a or b |
| Answer» C. Neither | |
| 44. |
If rupee is getting depreciated fast and is considered undesirable by the government, the RBI may be advised to |
| A. | Sell dollars in the foreign exchange market |
| B. | Purchase dollars |
| C. | Print more currency notes |
| D. | Raise tariffs on imports |
| Answer» B. Purchase dollars | |
| 45. |
Indirect quotation is also known as |
| A. | home currency quotation |
| B. | foreign currency quotation |
| C. | European quotation |
| D. | American quotation |
| Answer» C. European quotation | |
| 46. |
Other things remaining unchanged, when in a country the price of foreign currency rises, national income is |
| A. | Likely to rise |
| B. | Likely to fall |
| C. | both |
| D. | Not affected |
| Answer» B. Likely to fall | |
| 47. |
If in an effort to control depreciation of rupee the RBI puts more dollars in the supply, it may lead to greater inflation, caused by |
| A. | Increase in money supply in the economy |
| B. | Reduced availability of goods due to increased exports. |
| C. | Reduced availability of goods due to reduced imports |
| D. | All of the above. |
| Answer» E. | |
| 48. |
A change from Rs. 140 = 2 to Rs. 60 = 1 indicates that Rs. is |
| A. | Appreciated |
| B. | Depreciated |
| C. | Neither |
| D. | Either (a) or (b |
| Answer» B. Depreciated | |
| 49. |
Depreciation of domestic currency leads to rise in: |
| A. | Exports |
| B. | Imports |
| C. | Both (a) and (b |
| D. | Neither (a) nor (b |
| Answer» B. Imports | |
| 50. |
The rate which is determined by the government is known as: |
| A. | flexible |
| B. | fixed |
| C. | floating exchange rate |
| D. | none of these |
| Answer» C. floating exchange rate | |