Question 1

The most important features of money is&#10;A)General acceptability&#10;B)Convertibility into gold&#10;C)Store of value&#10;D)Medium of exchange

Accepted Answer

General acceptability&#10;

Question 2

Which movement encourage the formation of commercial banks&#10;A)Swadeshi movement&#10;B)Quit India movement&#10;C)Non-cooperation movement&#10;D)Civil disobedience movement

Accepted Answer

The Swadeshi Movement, which began as a part of the anti-partition movement in Bengal in 1905, encouraged the use of Swadeshi goods and the promotion of Indian industry and economy. This movement led to the establishment of many national banks, schools, and industries, including commercial banks, to support the Indian economy independently of British control.

Question 3

Banking sector comes under which of the following sectors?&#10;A)Manufacturing sectors&#10;B)Industrial sectors&#10;C)Service sectors&#10;D)None of the above

Accepted Answer

The banking sector is part of the service sector because it provides financial services to individuals, businesses, and governments, rather than producing goods.

Question 4

Who is responsible for the supply of coins in India?&#10;A)Reserve bank of India&#10;B)Ministry of finance&#10;C)Ministry of commerce and industry&#10;D)Bankers association of India

Accepted Answer

The Ministry of Finance is responsible for the supply of coins in India, while the Reserve Bank of India handles the distribution.

Question 5

The commercial banks in India are governed by&#10;A)Reserve bank of India Act 1934&#10;B)Indian Companies Act 1956&#10;C)Indian Banking Regulation Act 1949&#10;D)Securities and Exchange Board of Indian Act 1993

Accepted Answer

The primary legislation that governs commercial banks in India is the Indian Banking Regulation Act of 1949. This act provides a framework for the regulation and supervision of banking firms in India.

Question 6

Deposits which arise from granting of loans are called&#10;A)primary deposits&#10;B)derivative deposits&#10;C)fixed deposits&#10;D)All the above

Accepted Answer

Derivative deposits are the deposits that arise when banks grant loans to their customers. The process involves the bank creating a deposit in the borrower's account, which effectively increases the total amount of money in the banking system. This is different from primary deposits, which are the initial deposits made by customers directly. Fixed deposits are a type of savings account with a fixed term.

Question 7

In order to control credit and investment , the central bank of a country should&#10;A)Sell securities in the open market and hike the cash reserve ratio&#10;B)Buy securities in the open market&#10;C)Buy securities from the open market and hike the cash reserve ratio&#10;D)Sell securities in the open market

Accepted Answer

Selling securities in the open market and hiking the cash reserve ratio both reduce the money supply, thereby controlling credit and investment.

Question 8

Which one of the following is not an instrument of credit control in the banking system?&#10;A)Open market operation&#10;B)Cash Reserve ratio&#10;C)Tax rate&#10;D)Bonds and debentures

Accepted Answer

Tax rate is not an instrument of credit control in the banking system. Credit control instruments are primarily used by central banks to regulate the amount of money in circulation and include options like open market operations, cash reserve ratios, and the issuance or management of bonds and debentures. Tax rates are used by the government to influence the economy but are not a direct tool for controlling credit.

Question 9

The commercial bank do not perform one function out of the following&#10;A)Mobilization of saving&#10;B)Giving loans and advances&#10;C)Issues currency notes&#10;D)Financing priority sectors

Accepted Answer

Commercial banks do not issue currency notes; this function is typically performed by a country's central bank or monetary authority.

Question 10

Credit creation power of the commercial banks gets limited by which of the following?&#10;A)Banking habits of the people&#10;B)Cash reserve ratio&#10;C)Credit policy of the Central bank&#10;D)All the above

Accepted Answer

The credit creation power of commercial banks is limited by various factors including the banking habits of the people, the cash reserve ratio (CRR) set by the central bank, and the overall credit policy of the central bank. These factors influence how much banks can lend out from the deposits they receive.

Question 11

Number of times a unit of money change hands in the course of a year is called&#10;A)Supply of money&#10;B)Purchasing power of money&#10;C)Velocity of money&#10;D)value of money

Accepted Answer

The answer of Number of times a unit of money...

Question 12

Assets - liability =&#10;A)Profit&#10;B)Working capital&#10;C)Capital&#10;D)Long term liability

Accepted Answer

The answer of Assets - liability =&#10;A)Profit&#10;B)Working capital&#10;C)Capital&#10;D)Long term liability...

Question 13

Debentures is also name as&#10;A)share&#10;B)Bond&#10;C)Equity&#10;D)Reserve

Accepted Answer

The answer of Debentures is also name as&#10;A)share&#10;B)Bond&#10;C)Equity&#10;D)Reserve...

Question 14

A bills of exchange when drawn requires&#10;A)Nothing&#10;B)Discounting&#10;C)Acceptance&#10;D)Investment

Accepted Answer

The answer of A bills of exchange when drawn requires&#10;A)Nothing&#10;B)Discounting&#10;C)Acceptance&#10;D)Investment...

Question 15

Which of the following money supply is used by RBI?&#10;A)Currency notes&#10;B)Coins&#10;C)Both A &B&#10;D)None of the above

Accepted Answer

The answer of Which of the following money supply is...

Question 16

The term 'bank liquidity' means&#10;A)Its capacity to create credit&#10;B)Its capacity to provide a high rate of interest&#10;C)Its capacity to convert its assets into cash&#10;D)None of the above

Accepted Answer

The answer of The term 'bank liquidity' means&#10;A)Its capacity to...

Deck 3: Money, Banking and Monetary Policy in India