Tag: economics

Questions Related to economics

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

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

  1. Reduces

  2. Increases

  3. Is not affected at all

  4. Difficult to say anything

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Correct Option: A
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. 

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

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

  1. Quantitative Measures

  2. Qualitative Measures

  3. Both (A) and (B)

  4. Neither (A) nor (B)

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Correct Option: C

As per RBI's new classification, M4 has been excluded from the scheme of monetary aggregates.

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

  1. True

  2. False

  3. Partially true

  4. None of these

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Correct Option: A

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

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

  1. Repo rate

  2. Reverse repo rate

  3. Discount rate

  4. Bank rate

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Correct Option: D

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

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

  1. Monetary Measures

  2. Fiscal Measures

  3. Controlling Investments Method

  4. None of the above

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Correct Option: A

In order to increase money supply in the country, the RBI may:

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

  1. Reduce CRR

  2. Increase CRR

  3. Sell securities in the open market

  4. Increase Bank Rate

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Correct Option: A

In 1979, RBI classified Money Stock in ________ Categories.

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

  1. 2 Categories

  2. 3 Categories

  3. 4 Categories

  4. 5 Categories

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Correct Option: C

NM1 in the money stock in India refers to:

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

  1. Post Office Savings Deposits

  2. Total Post Office Deposits

  3. Currency + Demand Deposits plus other Deposits with RBI

  4. Time Deposits with Banks

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Correct Option: C

As per RBI's new classification, if Rajesh transfers money from his Savings Account and makes a Fixed Deposit maturing after one year

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

  1. M1 falls, but M3 rises

  2. M1 rises, but M3 falls

  3. Both M1 and M3 falls

  4. Both M1 and f43 remain constant

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Correct Option: A

Which of these are functions of RBI?

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

  1. Issue of Currency

  2. Managing Public Debt

  3. Rediscounting Bills of Commercial Banks

  4. All of the above

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Correct Option: D