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Money and Banking online Test - 39

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Money and Banking online Test - 39
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Weekly Quiz Competition
  • Question 1
    1 / -0
    Central Bank of India is:
  • Question 2
    1 / -0
    The term _____ refers to facilities and institutional arrangements through which long-term funds, both debt and equity are raised and invested.
    Solution
    The term capital market refers to facilities and institutional arrangements through which long-term funds, both debt and equity are raised and invested. Capital market can be defined as a market for long and medium term funds. It refers to the organizations or institutions which provide funds for more than one year time period.
  • Question 3
    1 / -0
     The capital market should also be efficient in respect of ______________.
    Solution
    Capital market can be defined as a market for long and medium term funds. It refers to the organizations or institutions which provide funds for more than one year time period. The capital market should also be efficient in respect of:
    a) minimizing transaction costs b) the information that it delivers
    c) allocating capital most productively.
  • Question 4
    1 / -0
    RBI can issue currency notes up to which denomination?
    Solution
    RBI can issue any note of any denomination but NOT exceeding Rs. 10,000. The notes denomination is notified by Government and RBI acts accordingly. Under Section 22 of the Reserve Bank of India Act, RBI has sole right to issue currency notes of various denominations except one rupee notes.
  • Question 5
    1 / -0
    _____ is a statistical measure of the changes in a portfolio of stocks representing a portion of the overall market.
    Solution
    Index is a statistical measure of the changes in a portfolio of stocks representing a portion of the overall market. Index can be defined as a statistical measure of change in a securities market. In simple terms, index is an measure of something related to finance.
  • Question 6
    1 / -0
    Money supply is a _______ concept.
    Solution
    Money supply is measured as per the stock of money that is in circulation among the public at a particular point of time. Hence, money supply is a 'stock concept'.
  • Question 7
    1 / -0
    Which one of these is a limitation of the barter exchange?
    Solution

    Barter system was a system of exchange where goods were exchanged for goods and there was no common medium of exchange in the economy. Barter system had many drawbacks like lack of double coincidence of wants, lack of a common unit of value, difficulty of future payments or contractual payments and difficulty of storage of value and transfer of value. 

  • Question 8
    1 / -0
    Which of these is not a function of central bank?
    Solution
    Accepting deposits of general public is the function of commercial banks, as central bank does not deal with general public and only deals with commercial bank mainly for its reserve requirement.
  • Question 9
    1 / -0
    This function of Central Bank involves buying and selling of government securities from or to the public and commercial banks.
    Solution
    Open market operations refers to buying and selling of Government securities and treasury bills by the central bank with a view to regulate the supply of money in the economy. If central bank wants to increase the money supply it will purchase govt securities and if it want to decrease the money supply it will sell the securities.
  • Question 10
    1 / -0
    Which of the following will increase the money supply?
    Solution
    Fall in repo rate means bank get loans for less interest from RBI then banks give loans to there customers,as this will increase buying capacity of people since banks will give loan to all liberal people. 
    Purchase of open market securities means buying govt securities.
    Decrease in CRR means commercial banks have to maintain less reserve which is manadatory by RBI 

    Thus these all factors increses money supply.
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