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Prelims-IAS –ECONOMICS MCQ-08

1..The Reserve Bank of India (RBI) acts as a bankers’ bank. This would imply which of the following?

  1. Other banks retain their deposits with the RBI.
  2. The RBI lends funds to the commercial banks in times of need.
  3. The RBI advises the commercial banks on monetary matters.

Select the correct answer using the codes given below.
(a) 2 and 3 only
(b) 1 and 2 only
(c) 1 and 3 only
(d) 1, 2 and 3


2..Which of the following is incorrect?

(a)  Cash Reserve Ratio and Statutory Liquidity Ratios are inversely related to base rate.
(b)  Repo rate is directly related to base rate.
(c)  Open market operations are related to selling of government bonds by RBI.

(d)  Cut in repo rate may or may not lead tomonetary transmission.


3..Which of the following is/are quantitative credit control measures?

  1. Open Market Operations
  2. Statutory Liquidity Ratio
  3. Variation of margin requirements
  4. Repo rate

Select the correct answer using the code given below.
(a) 1 and 2 only
(b) 1, 2 and 3 only
(c) 1, 2 and 4 only
(d) 1, 2 and 3


4..What is base rate?

(a)  It is the rate at which RBI lends longterm to commercial banks and is a tool to regulate money supply in the economy.
(b)  It is the portion of the bank deposits that a bank should keep with the RBI in cash form.
(c)  It is the rate below which banks are not allowed to lend and was introduced to make credit market more transparent.

(d)  None of these


5..Which of the following banks are covered under the Banking Ombudsman?

  1. Regional Rural Banks
  2. Scheduled Commercial Bank
  3. Non-Scheduled Primary Co-operative Banks
Select the correct answer using the code given below.
(a) 1 and 3 only
(b) 2 and 3 only
(c) 1 and 2 only

(d) 1, 2 and 3


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