Indian Economy Test 52

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Indian Economy Test 52

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Weekly Quiz Competition

Question 1
1 / -0

With regards to Scheduled Commercial Banks ,consider the following statements about Regional Rural Banks (RRBs) in India
1 . RRBs are limited to a specific region comprising one or more district of a State .
2 . RRBs grant direct loans and advances only to small and marginal farmers .
3 . The lending rate of the RRBs is always less than the prevailing rates of Indian Commercial Banks.
4 . RRBs are functioned under the supervision of Security Exchange Board of India .
Which of the statement given above is / are correct ?

A
1 , 2 , 3 and 4

B
1 , 2 and 3

C
2 and 3

D
3 and 4
Question 2
1 / -0

Which one among the following money supplies is also known as Narrow Money in the Indian economy?

A
M1

B
M2

C
M3

D
M4

Solution

Narrow Money is denoted by M1 and is one of the basic indicators of money supply. It includes the total currency in circulation + demand deposits with banks (eg. savings deposits, current deposits etc) + other deposits with the RBI.
Question 3
1 / -0

Consider the following statements:
1) Liquidity Adjustment Facility operations help the RBI effectively transmit Interest rate signals to the market.
2) Under the repo or repurchase option, banks borrow money from the RBI via the sale of securities with an agreement to purchase the securities back at a fixed rate at a future date.
Which of the statement(s) given above is/are correct?

A
Only 1

B
Only 2

C
Both 1 and 2

D
Neither 1 nor 2

Solution

Liquidity Adjustment Facility is a mechanism used by RBI to control liquidity and transmit interest rate signals to the market. Banks can borrow money for short term at repo rate in case of emergency or for making adjustments to comply with SLR/CRR requirements.
Question 4
1 / -0

Which of the following is/are examples of ' Near Money'?
1) Treasury bill
2) Credit card
3) Savings accounts and small time deposits
4) Retail money market mutual funds
Select the correct answer using the codes given below.

A
Only 1

B
Only 2

C
1 , 2 and 3

D
1 , 3 and 4

Solution

'Near Money' refers to non-cash assets which are highly liquid, such as bank deposits (saving deposits, current deposits etc), treasury bills, money markets, widely traded foreign currencies etc. These are sometimes also referred to as 'quasi-money'.
Question 5
1 / -0

As we all know , Indian money market is divided in three sectors ,namely organised sector, unorganised sector and co-operative sectors . Call money market is the part of which of the following ?

A
Organised sector

B
Unorganised sector

C
Co-operative sector

D
All of the above
Question 6
1 / -0

With reference to India consider the following
1 . Nationalisation of banks
2 . Formation of Regional Rural Banks
3 . Adoption of village by bank branches
Which of the statement given above are correct about the Indian banking System ?

A
1 and 2

B
1 and 3

C
2 and 3

D
1 , 2 and 3
Question 7
1 / -0

Consider the following repo options
1) Term repo option refers to a repo with a specified end date in the money market.
2) Overnight repo option has a one-day maturity transaction period in the money market.
3) Open repo option has end date.
Which of the repo rates given above is / are correct ?

A
Only 1

B
1 and 3

C
2 and 3

D
All of the above
Question 8
1 / -0

Open market operations of Reserve Bank of India refers to

A
trading in securities

B
auctioning of foreign exchange

C
transaction in gold

D
None of above

Solution

Open Market Operations refer to the purchase and sale of the Government securities(trading of the securities) by RBI from/to market. The objective of Open Market Operations is to adjust the rupee liquidity conditions in the economy on a durable basis.
Question 9
1 / -0

With reference to Indian economy , consider the following statements
1 . The Lead Bank Scheme was started towards the close of 1980.
2 . The Lead Bank Scheme was aimed to bring a balanced regional development in the country.
Which of the statement given above is / are correct ?

A
Only 1

B
Only 2

C
Both 1 and 2

D
Neither 1 nor 2
Question 10
1 / -0

Which one among the following is correct about the Repo Rate in the Indian Economy?

A
It is the rate at which banks borrow funds from the RBI

B
It is the rate at which banks park their funds with the Central Bank

C
It is the percentage difference in the prices of repurchase of the bills from the original prices

D
Both 'a' and 'c'

Solution

Repo rate is a mechanism under the Liquidity Adjustment Facility (LAF) under which the banks borrow money from the Central Bank using Government securities as the collateral, with an obligation to buy back the securities later.

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Re-Attempt Weekly Quiz Competition

Indian Economy Test 52

Result

Indian Economy Test 52

Score

-

Rank

-

SHARING IS CARING

Question 1

1 , 2 , 3 and 4

1 , 2 and 3

2 and 3

3 and 4

Question 2

M1

M2

M3

M4

Solution

Question 3

Only 1

Only 2

Both 1 and 2

Neither 1 nor 2

Solution

Question 4

Only 1

Only 2

1 , 2 and 3

1 , 3 and 4

Solution

Question 5

Organised sector

Unorganised sector

Co-operative sector

All of the above

Question 6

1 and 2

1 and 3

2 and 3

1 , 2 and 3

Question 7

Only 1

1 and 3

2 and 3

All of the above

Question 8

trading in securities

auctioning of foreign exchange

transaction in gold

None of above

Solution

Question 9

Only 1

Only 2

Both 1 and 2

Neither 1 nor 2

Question 10

It is the rate at which banks borrow funds from the RBI

It is the rate at which banks park their funds with the Central Bank

It is the percentage difference in the prices of repurchase of the bills from the original prices

Both 'a' and 'c'

Solution

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