Money and Banking online Test

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Money and Banking online Test - 42

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Weekly Quiz Competition

Question 1
1 / -0

Which of the following come under the monetary aggregate M3?
1. Recurring deposits
2. Postal savings
3. Saving accounts
4. Current accounts

A
1,2 and 3

B
2,3 and 4

C
1,3 and 4

D
1,2 and 4

Solution

Postal savings either come under M: (demand deposits) or M4 (total deposits).
M3 is a collection of the money supply that includes M2 money as well as large time deposits, institutional money market funds, short-term repurchase agreements, and larger liquid funds.
Question 2
1 / -0

As per the New Monetary Aggregates of the RBI which of the following doesn't belong to the 'broad money'? Select the answer using the code given below:
1. Bankers' deposits with the RBI
2. Demand & Time Deposits of the Banks
3. Other Deposits with the RBI
4. Currency & coins with the public
5. Currency in circulation
6. Savings of Post Offices

A
1,2 and 4

B
3,4 and 5

C
1,5 and 6

D
2,3 and 4

Solution

In the new monetary aggregate M, is the 'broad money' (like the old one). Bankers' deposit is part of the 'reserve money'. Post Offices' saving deposits (excluding National Saving Certificates) are part of M4.
Question 3
1 / -0

Select the correct ones which are part of the 'reserve money' of India-use the code:
1. Banker's deposits with the RBI
2. India's balance in the foreign central banks
3. India's balance in the Basel Bank

A
Only 1

B
1 and 2

C
Only 2

D
1,2 and 3
Question 4
1 / -0

Which of the following are not the limitations of barter exchange?

A
Double coincidence of wants

B
legal acceptability

C
Store of value

D
Standard of deferred payments

Solution

Legal acceptability was not a limitation of barter exchange. Hence, option B is correct answer.
Question 5
1 / -0

Which one of the following International institutions has offered the concessional loans and grants to the world's poorest developing countries?

A
IFC

B
IDA

C
IMF

D
WB

Solution

International Developing Association has offered the concessional loans and grants to the world's poorest developing countries. The IDA is a member of the World Bank Group and is administered by the International Bank for Reconstruction and Development (IBRD).
Question 6
1 / -0

The capital market consists of

A
Stock exchanges

B
Development banks

C
Commercial banks

D
All of the above

Solution

The term capital market refers to facilities and institutional arrangements through which long-term funds, both debt and equity are raised and invested. It consists of development banks, commercial banks and stock exchanges.
Question 7
1 / -0

According to Keynes, the transaction demand of money is positively associated with the level of

A
Income

B
Investment

C
Savings

D
Consumption

Solution

According to Keynes, the transaction demand of money is positively associated with the level of Income. Hence, option A is correct.
Question 8
1 / -0

It is a market for short-term funds which deals in monetary assets whose period of maturity is up to one year.

A
Money market

B
Capital market

C
Secondary market

D
Primary market

Solution

The money market is a market for short term funds which deals in monetary assets whose period of maturity is upto one year. These assets are close substitutes for money. It is a market where low risk, unsecured and short term debt instruments that are highly liquid are issued and actively traded.
Question 9
1 / -0

In order to encourage investment in the economy, the Central Bank may___________. (Choose the correct alternative)

A
Reduce Cash Reserve Ratio

B
Increase Cash Reserve Ratio

C
Sell Government securities in open market

D
Increase Bank Rate

Solution

In order to encourage investment in the economy, the Central Bank may reduce Cash Reserve Ratio.
Hence, A is the correct option.
Question 10
1 / -0

Select the functions of the RBI, which are correct using the code given below:
1. as 'banker to the Government' it performs merchant banking function for the central and the state governments and also acts are their 'banker'.
2. As 'banker to banks', it maintains banking accounts of all scheduled banks.

A
Only 1

B
Only 2

C
1 and 2

D
Neither 1 nor 2

Solution

It means the RBI functions as the body, which manage the borrowing programmes of the government in India. Statement-2 talks about the 'banker of the last resort' function of the RBI under which it lends money to all operating banks and the financial institutions in the country.

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Re-Attempt Weekly Quiz Competition

Money and Banking online Test - 42

Result

Money and Banking online Test - 42

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SHARING IS CARING

Question 1

1,2 and 3

2,3 and 4

1,3 and 4

1,2 and 4

Solution

Question 2

1,2 and 4

3,4 and 5

1,5 and 6

2,3 and 4

Solution

Question 3

Only 1

1 and 2

Only 2

1,2 and 3

Question 4

Double coincidence of wants

legal acceptability

Store of value

Standard of deferred payments

Solution

Question 5

IFC

IDA

IMF

WB

Solution

Question 6

Stock exchanges

Development banks

Commercial banks

All of the above

Solution

Question 7

Income

Investment

Savings

Consumption

Solution

Question 8

Money market

Capital market

Secondary market

Primary market

Solution

Question 9

Reduce Cash Reserve Ratio

Increase Cash Reserve Ratio

Sell Government securities in open market

Increase Bank Rate

Solution

Question 10

Only 1

Only 2

1 and 2

Neither 1 nor 2

Solution

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