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All questions of Banking in India for BPSC (Bihar) Exam
Which of the following will be part of fiscal deficit?
1. Internal debt
2. Government’s external debt
3. Securities issued to food corporation of India
4. Liability to RBI
5. Liability of Central Government to states
Select the correct answer using the codes given below:- a)1, 2, 3 and 4
- b)1, 2, 4 and 5
- c)1, 3, 4 and 5
- d)1, 2 and 4 only
Correct answer is option 'D'. Can you explain this answer?
Which of the following will be part of fiscal deficit?
1. Internal debt
2. Government’s external debt
3. Securities issued to food corporation of India
4. Liability to RBI
5. Liability of Central Government to states
Select the correct answer using the codes given below:
1. Internal debt
2. Government’s external debt
3. Securities issued to food corporation of India
4. Liability to RBI
5. Liability of Central Government to states
Select the correct answer using the codes given below:
a)
1, 2, 3 and 4
b)
1, 2, 4 and 5
c)
1, 3, 4 and 5
d)
1, 2 and 4 only
|
Raksha Das answered |
3 is considered as central assistance and is not considered as part of fiscal deficit
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The base year used for WPI is- a)1993-94
- b)2001-02
- c)2004-05
- d)None of the above
Correct answer is option 'C'. Can you explain this answer?
The base year used for WPI is
a)
1993-94
b)
2001-02
c)
2004-05
d)
None of the above
|
|
Koko Singh answered |
Option C is correct that is 2004-05.
Consider the following statements:
1. White Label ATMs are owned and operated by the bank
2. Green Label ATMs are used for agricultural transactions
3. Brown Label ATMs are owned and operated by a non-banking entity
Which of the statements given above is/are correct?- a)1 and 2 only
- b)2 only
- c) 3 only
- d)2 and 3 only
Correct answer is option 'B'. Can you explain this answer?
Consider the following statements:
1. White Label ATMs are owned and operated by the bank
2. Green Label ATMs are used for agricultural transactions
3. Brown Label ATMs are owned and operated by a non-banking entity
Which of the statements given above is/are correct?
1. White Label ATMs are owned and operated by the bank
2. Green Label ATMs are used for agricultural transactions
3. Brown Label ATMs are owned and operated by a non-banking entity
Which of the statements given above is/are correct?
a)
1 and 2 only
b)
2 only
c)
3 only
d)
2 and 3 only
|
Lekshmi Basak answered |
-On Site ATM - ATMs Inside the Bank
-Off site ATM - ATM outside the bank premises but is located at other places, such as shopping centres, airports, railways station and petrol stations.
-White Label ATM - ATM Provided by NBFC (Non Banking Financial Company)
-Green Label ATM - ATM Provided for Agricultural Transaction
-Orange Label ATM - ATM Provided for Share Transactions
-Yellow Label ATM - ATM provided for E-commerce
-Pink Label ATM - ATM for women banking
-Brown Label ATM - ATM are those Automated Teller Machines where hardware and the lease of the ATM machine is owned by a service provider but cash management and connectivity to banking networks is provided by a sponsor bank .
Fiscal Policy in India is formulated by which of the following?- a)The Reserve Bank of India
- b)NITI Aayog
- c)Ministry of Finance
- d)The Finance Commission
Correct answer is option 'C'. Can you explain this answer?
Fiscal Policy in India is formulated by which of the following?
a)
The Reserve Bank of India
b)
NITI Aayog
c)
Ministry of Finance
d)
The Finance Commission
|
|
Ritika Choudhury answered |
Ministry of finance is the nodal agency for formulation of the fiscal policy
Consider the following statements about Statutory Liquidity Ratio (SLR):
1. It includes cash and gold.
2. Banks may earn returns on money parked as SLR
Which of the statements given above is/are correct?- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'C'. Can you explain this answer?
Consider the following statements about Statutory Liquidity Ratio (SLR):
1. It includes cash and gold.
2. Banks may earn returns on money parked as SLR
Which of the statements given above is/are correct?
1. It includes cash and gold.
2. Banks may earn returns on money parked as SLR
Which of the statements given above is/are correct?
a)
1 only
b)
2 only
c)
Both 1 and 2
d)
Neither 1 nor 2
|
Sneha Choudhary answered |
Statutory Liquidity Ratio (SLR)
The Statutory Liquidity Ratio (SLR) is the percentage of a bank's Net Demand and Time Liabilities (NDTL) that it needs to maintain in the form of liquid assets such as cash, gold, and approved securities. It is a prudential regulation imposed by the Reserve Bank of India (RBI) on banks to ensure the stability and solvency of the banking system.
Statement 1: It includes cash and gold.
The first statement is correct. The SLR includes cash, gold, and approved securities. Banks are required to maintain a certain proportion of their NDTL as liquid assets, and these assets can include cash, gold, and government securities. However, the SLR does not include all the assets held by a bank, but only those that meet the criteria specified by the RBI.
Statement 2: Banks may earn returns on money parked as SLR
The second statement is also correct. Banks are allowed to earn returns on the money parked as SLR. While maintaining the SLR, banks invest their excess funds in government securities, which are considered safe and provide a return on investment. This allows banks to earn income on the funds that they are required to hold as liquid assets. The returns earned on SLR investments help banks enhance their profitability and manage their liquidity position effectively.
Conclusion
Both statements 1 and 2 are correct. The SLR includes cash, gold, and approved securities, and banks are allowed to earn returns on the money parked as SLR. The SLR requirement serves as a prudential measure to ensure that banks maintain a certain level of liquidity and stability in their operations. It also helps the central bank in regulating the money supply and managing inflation in the economy.
The Statutory Liquidity Ratio (SLR) is the percentage of a bank's Net Demand and Time Liabilities (NDTL) that it needs to maintain in the form of liquid assets such as cash, gold, and approved securities. It is a prudential regulation imposed by the Reserve Bank of India (RBI) on banks to ensure the stability and solvency of the banking system.
Statement 1: It includes cash and gold.
The first statement is correct. The SLR includes cash, gold, and approved securities. Banks are required to maintain a certain proportion of their NDTL as liquid assets, and these assets can include cash, gold, and government securities. However, the SLR does not include all the assets held by a bank, but only those that meet the criteria specified by the RBI.
Statement 2: Banks may earn returns on money parked as SLR
The second statement is also correct. Banks are allowed to earn returns on the money parked as SLR. While maintaining the SLR, banks invest their excess funds in government securities, which are considered safe and provide a return on investment. This allows banks to earn income on the funds that they are required to hold as liquid assets. The returns earned on SLR investments help banks enhance their profitability and manage their liquidity position effectively.
Conclusion
Both statements 1 and 2 are correct. The SLR includes cash, gold, and approved securities, and banks are allowed to earn returns on the money parked as SLR. The SLR requirement serves as a prudential measure to ensure that banks maintain a certain level of liquidity and stability in their operations. It also helps the central bank in regulating the money supply and managing inflation in the economy.
Consider the following statements regarding the Marginal Standing Facility (MSF) of RBI:
1. It is similar to the repo rate for the financial institutions.
2. It is on the lines of the liquidity adjustment facility and part of it.
3. Though it is a costlier route to fulfill overnight requirement of funds, it is not a penal rate.
4. Banks use this route once they exhaust all channels to raise short-term funds.
Which of the statements given above is/are not correct?
- a)1, 3 and 4 only
- b)1, 2 and 3 only
- c)1, 2 and 4 only
- d)1, 2, 3 and 4
Correct answer is option 'A'. Can you explain this answer?
Consider the following statements regarding the Marginal Standing Facility (MSF) of RBI:
1. It is similar to the repo rate for the financial institutions.
2. It is on the lines of the liquidity adjustment facility and part of it.
3. Though it is a costlier route to fulfill overnight requirement of funds, it is not a penal rate.
4. Banks use this route once they exhaust all channels to raise short-term funds.
Which of the statements given above is/are not correct?
1. It is similar to the repo rate for the financial institutions.
2. It is on the lines of the liquidity adjustment facility and part of it.
3. Though it is a costlier route to fulfill overnight requirement of funds, it is not a penal rate.
4. Banks use this route once they exhaust all channels to raise short-term funds.
Which of the statements given above is/are not correct?
a)
1, 3 and 4 only
b)
1, 2 and 3 only
c)
1, 2 and 4 only
d)
1, 2, 3 and 4
|
Vijay Kumar answered |
The correct answer is:
1. 1, 3 and 4 only
Explanation:
-
Statement 1 is not correct: The Marginal Standing Facility (MSF) is not exactly the same as the repo rate; it is an emergency borrowing rate for banks above the repo rate. The MSF allows banks to borrow funds overnight from the RBI against government securities.
-
Statement 2 is correct: The MSF is on the lines of the Liquidity Adjustment Facility (LAF) and is a part of it, designed to help banks manage overnight liquidity shortages.
-
Statement 3 is not correct: While the MSF is a costlier route compared to the repo rate, it is considered a penal rate since it is higher than the repo rate to discourage excessive reliance on it.
-
Statement 4 is not correct: Although banks typically use the MSF after exhausting other avenues for raising short-term funds, the nature of MSF being a penal rate and its higher cost is implied in the statement, making it misleading.
Therefore, statements 1, 3, and 4 are not correct.
The establishment of payment banks is being allowed in India to promote financial inclusion. Which of the following statements is/are correct in this context?
1. Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of payment banks
2. Payment banks can issue both credit cards and debit cards
3. Payment banks cannot undertake lending activities
Select the correct answer using the code given below:- a)1 only
- b)1 and 3 only
- c)2 only
- d)1, 2 and 3
Correct answer is option 'B'. Can you explain this answer?
The establishment of payment banks is being allowed in India to promote financial inclusion. Which of the following statements is/are correct in this context?
1. Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of payment banks
2. Payment banks can issue both credit cards and debit cards
3. Payment banks cannot undertake lending activities
Select the correct answer using the code given below:
1. Mobile telephone companies and supermarket chains that are owned and controlled by residents are eligible to be promoters of payment banks
2. Payment banks can issue both credit cards and debit cards
3. Payment banks cannot undertake lending activities
Select the correct answer using the code given below:
a)
1 only
b)
1 and 3 only
c)
2 only
d)
1, 2 and 3
|
|
Anshul Thakur answered |
Payment banks eg paytm
Which of the following receipts are the revenue receipts of Government?
1. Recovery of loans given to the states and union territories
2. Interest received from telecommunication
3. Debt and profit received from RBI
4. Income by tax
Select the correct option:- a)1, 2, 4
- b)2, 3, 4
- c)1, 2, 3
- d)1, 2, 3, 4
Correct answer is option 'B'. Can you explain this answer?
Which of the following receipts are the revenue receipts of Government?
1. Recovery of loans given to the states and union territories
2. Interest received from telecommunication
3. Debt and profit received from RBI
4. Income by tax
Select the correct option:
1. Recovery of loans given to the states and union territories
2. Interest received from telecommunication
3. Debt and profit received from RBI
4. Income by tax
Select the correct option:
a)
1, 2, 4
b)
2, 3, 4
c)
1, 2, 3
d)
1, 2, 3, 4
|
Kiran Sharma answered |
Revenue Receipts of Government
Revenue receipts refer to the income received by the government through various sources. These receipts are non-debt receipts and do not create any liability for the government. They are used to meet the day-to-day expenses and operational costs of the government. Revenue receipts can be further classified into tax revenue and non-tax revenue.
Tax Revenue
Tax revenue consists of the income generated through various taxes levied by the government. It includes direct taxes such as income tax, corporate tax, and indirect taxes such as goods and services tax (GST), excise duty, customs duty, etc.
Non-Tax Revenue
Non-tax revenue includes all other sources of income for the government apart from taxes. It includes various receipts such as interest received on loans given, dividends from public sector undertakings, fees and fines, etc.
Analysis of Receipts
1. Recovery of loans given to the states and union territories: This is a non-tax revenue receipt. The government provides loans to the states and union territories for various purposes. When these loans are repaid, it is considered as a revenue receipt for the government. Therefore, option 1 is a revenue receipt.
2. Interest received from telecommunication: This is a non-tax revenue receipt. The government earns revenue through the licensing and spectrum fees charged to telecommunication companies. Additionally, the government may also earn interest on loans given to the telecommunication sector. Therefore, option 2 is a revenue receipt.
3. Debt and profit received from RBI: This is a non-tax revenue receipt. The government may earn revenue in the form of interest on loans given to the Reserve Bank of India (RBI) or profit shared by the RBI. Therefore, option 3 is a revenue receipt.
4. Income by tax: This is a tax revenue receipt. Taxes levied on individuals and businesses form a major part of the government's revenue. Therefore, option 4 is a revenue receipt.
Conclusion
Based on the analysis, options 2, 3, and 4 are revenue receipts of the government. Therefore, the correct option is b) 2, 3, 4.
Revenue receipts refer to the income received by the government through various sources. These receipts are non-debt receipts and do not create any liability for the government. They are used to meet the day-to-day expenses and operational costs of the government. Revenue receipts can be further classified into tax revenue and non-tax revenue.
Tax Revenue
Tax revenue consists of the income generated through various taxes levied by the government. It includes direct taxes such as income tax, corporate tax, and indirect taxes such as goods and services tax (GST), excise duty, customs duty, etc.
Non-Tax Revenue
Non-tax revenue includes all other sources of income for the government apart from taxes. It includes various receipts such as interest received on loans given, dividends from public sector undertakings, fees and fines, etc.
Analysis of Receipts
1. Recovery of loans given to the states and union territories: This is a non-tax revenue receipt. The government provides loans to the states and union territories for various purposes. When these loans are repaid, it is considered as a revenue receipt for the government. Therefore, option 1 is a revenue receipt.
2. Interest received from telecommunication: This is a non-tax revenue receipt. The government earns revenue through the licensing and spectrum fees charged to telecommunication companies. Additionally, the government may also earn interest on loans given to the telecommunication sector. Therefore, option 2 is a revenue receipt.
3. Debt and profit received from RBI: This is a non-tax revenue receipt. The government may earn revenue in the form of interest on loans given to the Reserve Bank of India (RBI) or profit shared by the RBI. Therefore, option 3 is a revenue receipt.
4. Income by tax: This is a tax revenue receipt. Taxes levied on individuals and businesses form a major part of the government's revenue. Therefore, option 4 is a revenue receipt.
Conclusion
Based on the analysis, options 2, 3, and 4 are revenue receipts of the government. Therefore, the correct option is b) 2, 3, 4.
Which of the following items come under ‘Current Account’ of the Balance of Payment?
1. Exports
2. Interest payments
3. Private remittance
4. FDI
5. External lending and borrowing
Select the correct answer using the code given below:- a)1, 2 and 3
- b)2, 3 and 4
- c)1, 2, 3 and 5
- d)1, 2, 3, 4 and 5
Correct answer is option 'A'. Can you explain this answer?
Which of the following items come under ‘Current Account’ of the Balance of Payment?
1. Exports
2. Interest payments
3. Private remittance
4. FDI
5. External lending and borrowing
Select the correct answer using the code given below:
1. Exports
2. Interest payments
3. Private remittance
4. FDI
5. External lending and borrowing
Select the correct answer using the code given below:
a)
1, 2 and 3
b)
2, 3 and 4
c)
1, 2, 3 and 5
d)
1, 2, 3, 4 and 5
|
Divyansh Singh answered |
The category of dairy products?
1. Milk
2. Cheese
3. Yogurt
4. Butter
5. Cream
6. Ice cream
7. Sour cream
8. Cottage cheese
9. Whey protein powder
10. Condensed milk.
1. Milk
2. Cheese
3. Yogurt
4. Butter
5. Cream
6. Ice cream
7. Sour cream
8. Cottage cheese
9. Whey protein powder
10. Condensed milk.
Which of the following is a union tax?
- a)Corporation tax
- b)Taxes on agricultural income
- c)Capitation taxes
- d)Land revenues
Correct answer is option 'A'. Can you explain this answer?
Which of the following is a union tax?
a)
Corporation tax
b)
Taxes on agricultural income
c)
Capitation taxes
d)
Land revenues
|
Baishali Choudhury answered |
Union taxes are given in the list of 7th schedule in the constitution.
Consider the following statements and identify the right ones
1. RBI has the sole right to issue currency notes
2. Minimum reserve system has been replaced by proportional reserve system
- a)1 and 2 both
- b)2 only
- c)1 only
- d)None
Correct answer is option 'A'. Can you explain this answer?
Consider the following statements and identify the right ones
1. RBI has the sole right to issue currency notes
2. Minimum reserve system has been replaced by proportional reserve system
1. RBI has the sole right to issue currency notes
2. Minimum reserve system has been replaced by proportional reserve system
a)
1 and 2 both
b)
2 only
c)
1 only
d)
None
|
Kunal Mukherjee answered |
Statement 1 is true: Yes, the Reserve Bank of India (RBI) has the sole authority to issue currency notes in India, excluding one rupee notes and coins, which are issued by the Ministry of Finance. Section 22 of the Reserve Bank of India Act gives the RBI this authority.
Statement 2 is true: The Reserve Bank of India (RBI) replaced the proportional reserve system with the minimum reserve system (MRS) in 1956 to make note issuance more flexible and to meet the economy's growing currency needs.
Hence both the statements are correct.
Statement 2 is true: The Reserve Bank of India (RBI) replaced the proportional reserve system with the minimum reserve system (MRS) in 1956 to make note issuance more flexible and to meet the economy's growing currency needs.
Hence both the statements are correct.
Who issues metallic coins in India?- a)RBI
- b)Government of India
- c)Banks and financial institutions
- d)Any of the above can issue it.
Correct answer is option 'B'. Can you explain this answer?
Who issues metallic coins in India?
a)
RBI
b)
Government of India
c)
Banks and financial institutions
d)
Any of the above can issue it.
|
Aravind Chatterjee answered |
The Government of India issues metallic coins in India. Coins, paper currency and deposits are the components of money supply in India.
Which of the following is known as broad money?
- a)M1
- b)M2
- c)M3
- d)M5
Correct answer is option 'C'. Can you explain this answer?
Which of the following is known as broad money?
a)
M1
b)
M2
c)
M3
d)
M5
|
|
Raksha Khanna answered |
M3 is known as broad money as more items are included in this measure when compared to M1 which is known as narrow money.
Which of the following is a subsidiary of SBI?- a)State Bank of Hyderabad
- b)State Bank of Mysore
- c)State Bank of Patiala
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following is a subsidiary of SBI?
a)
State Bank of Hyderabad
b)
State Bank of Mysore
c)
State Bank of Patiala
d)
All the above
|
|
Divyansh Ghosh answered |
SBI has 5 subsidiaries now. The other 2 are State Bank of Bikaner and Jaipur and State Bank of Travancore.
The amount a bank needs to maintain in form of cash, gold and other securities before giving credit is- a)SLR
- b)CRR
- c)OMO
- d)Bank rate
Correct answer is option 'A'. Can you explain this answer?
The amount a bank needs to maintain in form of cash, gold and other securities before giving credit is
a)
SLR
b)
CRR
c)
OMO
d)
Bank rate
|
|
Sandeep Nambiar answered |
The amount a bank needs to maintain in form of cash, gold and other securities before giving credit is called SLR.
Which of the following taxes is/are withdrawn or abolished?- a)Interest tax
- b)Estate duty
- c)Gift tax
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following taxes is/are withdrawn or abolished?
a)
Interest tax
b)
Estate duty
c)
Gift tax
d)
All the above
|
|
Sreemoyee Shah answered |
Interest tax was withdrawn in 2000-01, estate duty abolished in 1985 and gift tax in 1998-99.
The base year to calculate CPI-AL is- a)1980-81
- b)1986-87
- c)2001-02
- d)2003-04
Correct answer is option 'B'. Can you explain this answer?
The base year to calculate CPI-AL is
a)
1980-81
b)
1986-87
c)
2001-02
d)
2003-04
|
|
Devansh Datta answered |
The base year to calculate CPI-AL is 1986-87 and 260 items are included in the index.
Which of the following banks was not nationalized in 1969?- a)Vijaya Bank
- b)Canara Bank
- c)Bank of India
- d)Central Bank of India
Correct answer is option 'A'. Can you explain this answer?
Which of the following banks was not nationalized in 1969?
a)
Vijaya Bank
b)
Canara Bank
c)
Bank of India
d)
Central Bank of India
|
|
Aravind Chatterjee answered |
Vijaya Bank was nationalized in 1980 with 5 other banks. In 1969, 14 banks were nationalized.
The tax levied by the union government on income of individuals is known as- a)Personal income tax
- b)Interest tax
- c)Wealth tax
- d)Corporation tax
Correct answer is option 'A'. Can you explain this answer?
The tax levied by the union government on income of individuals is known as
a)
Personal income tax
b)
Interest tax
c)
Wealth tax
d)
Corporation tax
|
|
Kaavya Sarkar answered |
It is based on the principle of ability to pay. The tax levied by the union government on income of individuals is known as income tax.
Consider the following statements:
1. Repo rate and Reverse repo rate as an instrument of money market were introduced post economic reforms of 1991.
2. In reverse repo, RBI is the lender whereas Banks and Financial Institutions are borrowers.
Which of the statements given above is/are correct?- a)1 only
- b)2 only
- c)Both 1 and 2
- d)Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
Consider the following statements:
1. Repo rate and Reverse repo rate as an instrument of money market were introduced post economic reforms of 1991.
2. In reverse repo, RBI is the lender whereas Banks and Financial Institutions are borrowers.
Which of the statements given above is/are correct?
1. Repo rate and Reverse repo rate as an instrument of money market were introduced post economic reforms of 1991.
2. In reverse repo, RBI is the lender whereas Banks and Financial Institutions are borrowers.
Which of the statements given above is/are correct?
a)
1 only
b)
2 only
c)
Both 1 and 2
d)
Neither 1 nor 2
|
Srishti Gupta answered |
In reverse repo RBI absorbs excess liquidity and acts a borrower. IN Repo rate transaction the RBI acts as a lender as it infuses more money in the system.
Which of the following tools are used by RBI to maintain money supply in the economy?
1. Statutory liquidity ratio
2. Repo Rate
3. Bank Rate
Select the correct answer using the code given below:- a)1 and 2 only
- b)2 only
- c)1 and 3 only
- d)1, 2 and 3
Correct answer is option 'D'. Can you explain this answer?
Which of the following tools are used by RBI to maintain money supply in the economy?
1. Statutory liquidity ratio
2. Repo Rate
3. Bank Rate
Select the correct answer using the code given below:
1. Statutory liquidity ratio
2. Repo Rate
3. Bank Rate
Select the correct answer using the code given below:
a)
1 and 2 only
b)
2 only
c)
1 and 3 only
d)
1, 2 and 3
|
Kavita Shah answered |
All of the above are used to maintain money supply in the economy. They are quantitative measures for the same.
Consider the following statements and identify the right ones.
1. RBI provides advice in all monetary matters except agriculture and industrial finance.
2. RBI is obliged to transact business of central government and state governments including J&K- a)1 only
- b)2 only
- c)Both
- d)None
Correct answer is option 'D'. Can you explain this answer?
Consider the following statements and identify the right ones.
1. RBI provides advice in all monetary matters except agriculture and industrial finance.
2. RBI is obliged to transact business of central government and state governments including J&K
1. RBI provides advice in all monetary matters except agriculture and industrial finance.
2. RBI is obliged to transact business of central government and state governments including J&K
a)
1 only
b)
2 only
c)
Both
d)
None
|
Mahi Chakraborty answered |
RBI provides advice in all monetary matters including agriculture and industrial finance. RBI is obliged to transact business of central government and state governments excluding J&K.
Consider the following statements and identify the right ones.i. For measuring overall inflation in the economy, CPI is used.ii. WPI was first published in 1942 for 23 commodities- a)i only
- b)ii only
- c)both
- d)none
Correct answer is option 'B'. Can you explain this answer?
Consider the following statements and identify the right ones.i. For measuring overall inflation in the economy, CPI is used.ii. WPI was first published in 1942 for 23 commodities
a)
i only
b)
ii only
c)
both
d)
none
|
|
Sagar Nair answered |
For measuring overall inflation in the economy, WPI is used. WPI was first published in 1942 for 23 commodities.
Which of the following is/are part of Capital Account in Balance of Payments?
1. External bonds issued by the Government of India.
2. Unilateral transfers like gifts and donations.
3. Quota payment to IMF.
Select the correct code:- a)1 and 2 only
- b)1 and 3 only
- c)2 and 3 only
- d)1, 2 and 3
Correct answer is option 'B'. Can you explain this answer?
Which of the following is/are part of Capital Account in Balance of Payments?
1. External bonds issued by the Government of India.
2. Unilateral transfers like gifts and donations.
3. Quota payment to IMF.
Select the correct code:
1. External bonds issued by the Government of India.
2. Unilateral transfers like gifts and donations.
3. Quota payment to IMF.
Select the correct code:
a)
1 and 2 only
b)
1 and 3 only
c)
2 and 3 only
d)
1, 2 and 3
|
|
Sakshi Pillai answered |
Capital Account in Balance of Payments
The capital account is one of the two main components of the balance of payments, the other being the current account. It records the flow of funds between a country and the rest of the world for the purpose of investment and borrowing. The capital account consists of two sub-accounts: the capital transfers and the acquisition and disposal of non-produced, non-financial assets.
1. External bonds issued by the Government of India
External bonds issued by the Government of India are a part of the capital account. When the government issues bonds to foreign investors, it attracts capital flows into the country. These bonds represent a debt obligation of the Indian government to the bondholders and are included in the capital account as they involve cross-border financial transactions.
2. Unilateral transfers like gifts and donations
Unilateral transfers, such as gifts and donations, are not a part of the capital account. These transfers are recorded in the current account of the balance of payments. The current account captures the flow of goods, services, income, and current transfers between a country and the rest of the world. Unilateral transfers are considered as current transfers and do not involve any exchange of assets or liabilities. They are recorded separately in the current account to measure the net transfer of resources.
3. Quota payment to IMF
Quota payment to the International Monetary Fund (IMF) is also a part of the capital account. Quota payments represent the capital contribution made by member countries to the IMF. These contributions determine a country's voting power, access to financial resources, and participation in decision-making within the IMF. Quota payments are considered as capital transfers and are included in the capital account as they involve the movement of financial resources across borders.
Conclusion
Based on the above analysis, option B is the correct answer. External bonds issued by the Government of India and quota payment to IMF are part of the capital account in the balance of payments. Unilateral transfers like gifts and donations, on the other hand, are recorded in the current account.
The capital account is one of the two main components of the balance of payments, the other being the current account. It records the flow of funds between a country and the rest of the world for the purpose of investment and borrowing. The capital account consists of two sub-accounts: the capital transfers and the acquisition and disposal of non-produced, non-financial assets.
1. External bonds issued by the Government of India
External bonds issued by the Government of India are a part of the capital account. When the government issues bonds to foreign investors, it attracts capital flows into the country. These bonds represent a debt obligation of the Indian government to the bondholders and are included in the capital account as they involve cross-border financial transactions.
2. Unilateral transfers like gifts and donations
Unilateral transfers, such as gifts and donations, are not a part of the capital account. These transfers are recorded in the current account of the balance of payments. The current account captures the flow of goods, services, income, and current transfers between a country and the rest of the world. Unilateral transfers are considered as current transfers and do not involve any exchange of assets or liabilities. They are recorded separately in the current account to measure the net transfer of resources.
3. Quota payment to IMF
Quota payment to the International Monetary Fund (IMF) is also a part of the capital account. Quota payments represent the capital contribution made by member countries to the IMF. These contributions determine a country's voting power, access to financial resources, and participation in decision-making within the IMF. Quota payments are considered as capital transfers and are included in the capital account as they involve the movement of financial resources across borders.
Conclusion
Based on the above analysis, option B is the correct answer. External bonds issued by the Government of India and quota payment to IMF are part of the capital account in the balance of payments. Unilateral transfers like gifts and donations, on the other hand, are recorded in the current account.
Which of the following is a Fiscal Policy tool in India?
1. Goods and Services Tax
2. Repo rate
3. Corporate tax
4. Public infrastructure spending
Select the correct option using the code given below:- a)1, 2 and 3 only
- b)1, 3 and 4 only
- c)2 and 4 only
- d)1, 2, 3 and 4
Correct answer is option 'B'. Can you explain this answer?
Which of the following is a Fiscal Policy tool in India?
1. Goods and Services Tax
2. Repo rate
3. Corporate tax
4. Public infrastructure spending
Select the correct option using the code given below:
1. Goods and Services Tax
2. Repo rate
3. Corporate tax
4. Public infrastructure spending
Select the correct option using the code given below:
a)
1, 2 and 3 only
b)
1, 3 and 4 only
c)
2 and 4 only
d)
1, 2, 3 and 4
|
|
Charvi Choudhary answered |
Explanation:
Fiscal policy refers to the use of government spending and taxation to influence the economy. In India, there are several fiscal policy tools that are used to manage the economy. Among the options given, the correct ones are:
1. Goods and Services Tax (GST):
The Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. It is a fiscal policy tool because it affects both government revenue and consumer spending. By adjusting the GST rates, the government can influence the prices of goods and services, which in turn affects consumption and investment.
3. Corporate tax:
Corporate tax refers to the tax levied on the profits of companies. By adjusting the corporate tax rate, the government can influence the profitability of businesses and their investment decisions. Lowering corporate taxes can incentivize companies to invest more, stimulate economic growth, and create job opportunities.
4. Public infrastructure spending:
Public infrastructure spending refers to government expenditure on infrastructure projects such as roads, bridges, railways, and airports. This form of spending is a fiscal policy tool because it directly impacts economic activity. Increased public infrastructure spending can stimulate aggregate demand, create jobs, and boost economic growth.
2. Repo rate:
The repo rate is not a fiscal policy tool but a monetary policy tool. It is the rate at which the central bank lends money to commercial banks. Changes in the repo rate influence interest rates in the economy, which in turn affects borrowing costs and investment decisions. The repo rate is set by the Reserve Bank of India (RBI) and is used to manage inflation and economic growth.
Therefore, the correct option is b) 1, 3, and 4 only.
Fiscal policy refers to the use of government spending and taxation to influence the economy. In India, there are several fiscal policy tools that are used to manage the economy. Among the options given, the correct ones are:
1. Goods and Services Tax (GST):
The Goods and Services Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India. It is a fiscal policy tool because it affects both government revenue and consumer spending. By adjusting the GST rates, the government can influence the prices of goods and services, which in turn affects consumption and investment.
3. Corporate tax:
Corporate tax refers to the tax levied on the profits of companies. By adjusting the corporate tax rate, the government can influence the profitability of businesses and their investment decisions. Lowering corporate taxes can incentivize companies to invest more, stimulate economic growth, and create job opportunities.
4. Public infrastructure spending:
Public infrastructure spending refers to government expenditure on infrastructure projects such as roads, bridges, railways, and airports. This form of spending is a fiscal policy tool because it directly impacts economic activity. Increased public infrastructure spending can stimulate aggregate demand, create jobs, and boost economic growth.
2. Repo rate:
The repo rate is not a fiscal policy tool but a monetary policy tool. It is the rate at which the central bank lends money to commercial banks. Changes in the repo rate influence interest rates in the economy, which in turn affects borrowing costs and investment decisions. The repo rate is set by the Reserve Bank of India (RBI) and is used to manage inflation and economic growth.
Therefore, the correct option is b) 1, 3, and 4 only.
Regional Rural Banks work at- a)Hobli level
- b)Taluk level
- c)District level
- d)All levels
Correct answer is option 'C'. Can you explain this answer?
Regional Rural Banks work at
a)
Hobli level
b)
Taluk level
c)
District level
d)
All levels
|
|
Poulomi Chakraborty answered |
Regional Rural Banks (RRBs) work at the District level.
Explanation:
Regional Rural Banks (RRBs) are financial institutions that were established with the aim of providing banking services to rural areas and promoting agricultural and rural development. RRBs were set up under the provisions of the Regional Rural Banks Act, 1976.
RRBs are established as a partnership between the Central Government, the State Government, and the sponsoring bank. The sponsoring bank can be a nationalized bank or a public sector bank.
Structure of Regional Rural Banks:
RRBs are organized at multiple levels, including the District level. The structure of RRBs can be summarized as follows:
1. District Level: RRBs operate at the District level and have their headquarters in the respective Districts. Each RRB is assigned a specific area of operation, which usually corresponds to a District or a group of Districts.
2. Branches: RRBs have a network of branches within their operational area. These branches are responsible for providing banking services to the rural population, including farmers, agricultural laborers, and other rural residents.
3. State Level: RRBs are sponsored by a nationalized bank or a public sector bank, which operates at the State level. The sponsoring bank provides financial and managerial support to the RRBs.
4. Central Level: The Central Government, through the Ministry of Finance, provides overall supervision and control over RRBs. The National Bank for Agriculture and Rural Development (NABARD) is responsible for coordinating and regulating the activities of RRBs at the national level.
Conclusion:
In conclusion, Regional Rural Banks (RRBs) work at the District level. They have their headquarters in the respective Districts and operate through a network of branches within their operational area. RRBs play a crucial role in providing banking services to the rural population and promoting agricultural and rural development.
Explanation:
Regional Rural Banks (RRBs) are financial institutions that were established with the aim of providing banking services to rural areas and promoting agricultural and rural development. RRBs were set up under the provisions of the Regional Rural Banks Act, 1976.
RRBs are established as a partnership between the Central Government, the State Government, and the sponsoring bank. The sponsoring bank can be a nationalized bank or a public sector bank.
Structure of Regional Rural Banks:
RRBs are organized at multiple levels, including the District level. The structure of RRBs can be summarized as follows:
1. District Level: RRBs operate at the District level and have their headquarters in the respective Districts. Each RRB is assigned a specific area of operation, which usually corresponds to a District or a group of Districts.
2. Branches: RRBs have a network of branches within their operational area. These branches are responsible for providing banking services to the rural population, including farmers, agricultural laborers, and other rural residents.
3. State Level: RRBs are sponsored by a nationalized bank or a public sector bank, which operates at the State level. The sponsoring bank provides financial and managerial support to the RRBs.
4. Central Level: The Central Government, through the Ministry of Finance, provides overall supervision and control over RRBs. The National Bank for Agriculture and Rural Development (NABARD) is responsible for coordinating and regulating the activities of RRBs at the national level.
Conclusion:
In conclusion, Regional Rural Banks (RRBs) work at the District level. They have their headquarters in the respective Districts and operate through a network of branches within their operational area. RRBs play a crucial role in providing banking services to the rural population and promoting agricultural and rural development.
Which of the following about money supply measure adopted in 1977 is correct?- a)M2= M1 +demand deposits with post offices
- b)M3= M1 +term deposits with banks
- c)M4= M3+total deposits with post offices
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following about money supply measure adopted in 1977 is correct?
a)
M2= M1 +demand deposits with post offices
b)
M3= M1 +term deposits with banks
c)
M4= M3+total deposits with post offices
d)
All the above
|
|
Akshat Jain answered |
These are the measures of money supply adopted by RBI in 1977.
Consider the following statements and identify the right ones.
i. Post nationalization, banks were supposed to open more branches in rural and semi-urban areas
ii. Banks had to provide credit facilities to areas that come under priority sector.- a)i only
- b)ii only
- c)both
- d)none
Correct answer is option 'C'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. Post nationalization, banks were supposed to open more branches in rural and semi-urban areas
ii. Banks had to provide credit facilities to areas that come under priority sector.
i. Post nationalization, banks were supposed to open more branches in rural and semi-urban areas
ii. Banks had to provide credit facilities to areas that come under priority sector.
a)
i only
b)
ii only
c)
both
d)
none
|
|
Anmol Jain answered |
Post nationalization, banks were supposed to open more branches in rural and semi-urban areas in order to collect savings from these areas.
The most important source of revenue to the states is- a)Sales tax
- b)Service tax
- c)Excise duty
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
The most important source of revenue to the states is
a)
Sales tax
b)
Service tax
c)
Excise duty
d)
None of the above
|
|
Anirudh Joshi answered |
Sales tax is the tax on sale of goods and is influenced by the value added tax system.
Regional Rural Banks work at- a)Hobli level
- b)Taluk level
- c)District level
- d)All levels
Correct answer is option 'C'. Can you explain this answer?
Regional Rural Banks work at
a)
Hobli level
b)
Taluk level
c)
District level
d)
All levels
|
|
Anshika Singh answered |
The SBI and its subsidiaries, 14 nationalised banks as well as 3 private banks were given the responsibility of development of districts.
Consider the following statements and identify the right ones.
i. Data on liquidity aggregates L1 and L2 are published weekly
ii. Data on L3 are published once in a quarter.- a)i only
- b)ii only
- c)both
- d)none
Correct answer is option 'B'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. Data on liquidity aggregates L1 and L2 are published weekly
ii. Data on L3 are published once in a quarter.
i. Data on liquidity aggregates L1 and L2 are published weekly
ii. Data on L3 are published once in a quarter.
a)
i only
b)
ii only
c)
both
d)
none
|
|
Aarya Choudhary answered |
Data on liquidity aggregates L1 and L2 are published on a monthly basis.
The base year to calculate CPI-IW is- a)2001
- b)1994
- c)1991
- d)None of the above
Correct answer is option 'D'. Can you explain this answer?
The base year to calculate CPI-IW is
a)
2001
b)
1994
c)
1991
d)
None of the above
|
Ananya Basu answered |
The Current series of CPI(IW) on base 1982=100 replacing the old series of 1960 base with effect from October, 1988, covers industrial workers employed in any one of the seven sectors namely factories, mines, plantation, railways, public motor transport undertakings, electricity generation and distribution
With reference to Open Market Operations (OMO), consider the following statements:
1. It refers to the sale and purchase of government securities and treasury bills by RBI.
2. Its objective is to regulate the money supply in the economy.
3. RBI deals with the public directly to carry out Open Market Operations.
Which of the statements given above is/are correct?- a)1 and 2 only
- b)1 and 3 only
- c)2 only
- d)1, 2 and 3
Correct answer is option 'A'. Can you explain this answer?
With reference to Open Market Operations (OMO), consider the following statements:
1. It refers to the sale and purchase of government securities and treasury bills by RBI.
2. Its objective is to regulate the money supply in the economy.
3. RBI deals with the public directly to carry out Open Market Operations.
Which of the statements given above is/are correct?
1. It refers to the sale and purchase of government securities and treasury bills by RBI.
2. Its objective is to regulate the money supply in the economy.
3. RBI deals with the public directly to carry out Open Market Operations.
Which of the statements given above is/are correct?
a)
1 and 2 only
b)
1 and 3 only
c)
2 only
d)
1, 2 and 3
|
|
Mira Sharma answered |
RBI deals with banks and other financial institutions for open market operations. RBI does not deal with the public directly.
If we deduct grants for creation of capital assets from revenue deficit, we arrive at concept of- a)Budget Deficit
- b)Primary Deficit
- c)Effective Revenue Deficit
- d)Fiscal Deficit
Correct answer is option 'C'. Can you explain this answer?
If we deduct grants for creation of capital assets from revenue deficit, we arrive at concept of
a)
Budget Deficit
b)
Primary Deficit
c)
Effective Revenue Deficit
d)
Fiscal Deficit
|
|
Sanvi Kapoor answered |
Effective revenue deficit = revenue deficit minus(-) grants for creation of capital assents. It is the standard formula for ERD.
Consider the following statements and identify the right ones.
1. RBI acts as clearing house for commercial banks.
2. It also grants license for setting up banking operations- a)1 only
- b)2 only
- c)Both
- d)None
Correct answer is option 'C'. Can you explain this answer?
Consider the following statements and identify the right ones.
1. RBI acts as clearing house for commercial banks.
2. It also grants license for setting up banking operations
1. RBI acts as clearing house for commercial banks.
2. It also grants license for setting up banking operations
a)
1 only
b)
2 only
c)
Both
d)
None
|
|
Ayush Desai answered |
Statement 1: RBI acts as clearing house for commercial banks.
- Explanation: The statement is correct. The Reserve Bank of India (RBI) acts as a clearinghouse for commercial banks. A clearinghouse is a financial institution that facilitates the exchange of funds between banks by clearing and settling transactions. In India, the RBI acts as the central clearinghouse for all interbank transactions.
Statement 2: It also grants a license for setting up banking operations.
- Explanation: The statement is correct. The RBI is responsible for granting licenses to banks for setting up banking operations in India. It regulates and supervises the banking sector in the country and ensures that banks meet certain criteria and requirements before granting them a license to operate.
Conclusion:
- Both statements 1 and 2 are correct. The RBI acts as a clearinghouse for commercial banks and also grants licenses for setting up banking operations.
- Explanation: The statement is correct. The Reserve Bank of India (RBI) acts as a clearinghouse for commercial banks. A clearinghouse is a financial institution that facilitates the exchange of funds between banks by clearing and settling transactions. In India, the RBI acts as the central clearinghouse for all interbank transactions.
Statement 2: It also grants a license for setting up banking operations.
- Explanation: The statement is correct. The RBI is responsible for granting licenses to banks for setting up banking operations in India. It regulates and supervises the banking sector in the country and ensures that banks meet certain criteria and requirements before granting them a license to operate.
Conclusion:
- Both statements 1 and 2 are correct. The RBI acts as a clearinghouse for commercial banks and also grants licenses for setting up banking operations.
What is the primary deficit in the context of Indian budget?- a)It is the difference between the government’s total expenditure and its total receipts excluding borrowing
- b)It is the excess of government’s revenue expenditure over revenue receipts
- c)It is the difference between the fiscal deficit of the current year and interest payments on the previous borrowings
- d)It is the difference between Revenue Deficit and Grants for Creation of Capital Assets
Correct answer is option 'C'. Can you explain this answer?
What is the primary deficit in the context of Indian budget?
a)
It is the difference between the government’s total expenditure and its total receipts excluding borrowing
b)
It is the excess of government’s revenue expenditure over revenue receipts
c)
It is the difference between the fiscal deficit of the current year and interest payments on the previous borrowings
d)
It is the difference between Revenue Deficit and Grants for Creation of Capital Assets
|
|
Ravi Sharma answered |
Primary deficit = fiscal deficit - interest payments. Standard formula
Consider the following statements about Monetary Policy Committee (MPC):
1. Its members are appointed by the President on the recommendations of the Central Government.
2. Its core mandate is to fix the benchmark policy interest rate to contain inflation within the target level.
3. It is headed by the Governor of RBI.
Which of the statements given above is/are correct?- a)1 and 2 only
- b)2 and 3 only
- c)1 and 3 only
- d)1, 2 and 3
Correct answer is option 'B'. Can you explain this answer?
Consider the following statements about Monetary Policy Committee (MPC):
1. Its members are appointed by the President on the recommendations of the Central Government.
2. Its core mandate is to fix the benchmark policy interest rate to contain inflation within the target level.
3. It is headed by the Governor of RBI.
Which of the statements given above is/are correct?
1. Its members are appointed by the President on the recommendations of the Central Government.
2. Its core mandate is to fix the benchmark policy interest rate to contain inflation within the target level.
3. It is headed by the Governor of RBI.
Which of the statements given above is/are correct?
a)
1 and 2 only
b)
2 and 3 only
c)
1 and 3 only
d)
1, 2 and 3
|
|
Kavita Shah answered |
It is a 6 member body.3 members are nominated by the central government and 3 are from the RBI. It sets the policy rate to keep inflation within the band decided by the central government
Consider the following statements:1. Money supply is a flow variable and is measured for a certain period.2. Interbank deposits, which one commercial bank deposits in another bank, are not included in the money supply.3. M1 and M2 are called broad money and re-least liquid of all.Which of the above statements is/are correct?- a)1 and 2 only
- b)2 and 3 only
- c)2 only
- d)1, 2 and 3
Correct answer is option 'C'. Can you explain this answer?
Consider the following statements:
1. Money supply is a flow variable and is measured for a certain period.
2. Interbank deposits, which one commercial bank deposits in another bank, are not included in the money supply.
3. M1 and M2 are called broad money and re-least liquid of all.
Which of the above statements is/are correct?
a)
1 and 2 only
b)
2 and 3 only
c)
2 only
d)
1, 2 and 3
|
|
Sneha Mishra answered |
Statement 1: Money supply is a flow variable and is measured for a certain period.
Money supply refers to the total amount of money available in the economy at a given point in time. It is measured over a specific period, usually a year, and is considered a flow variable. This means that it represents the rate at which money is being supplied to the economy. Therefore, statement 1 is correct.
Statement 2: Interbank deposits, which one commercial bank deposits in another bank, are not included in the money supply.
Interbank deposits are funds that one commercial bank deposits in another bank. These deposits are not considered part of the money supply because they do not directly affect the money available to the general public. Interbank deposits represent liabilities of commercial banks and are primarily used for settlement purposes between banks. Therefore, statement 2 is correct.
Statement 3: M1 and M2 are called broad money and are the least liquid of all.
M1 and M2 are measures of money supply used by central banks to track and analyze the money available in the economy. M1 includes currency in circulation, demand deposits, and other liquid assets. M2, on the other hand, includes M1 plus time deposits, savings deposits, and money market mutual funds.
While both M1 and M2 can be considered "broad money" as they include a wider range of assets than just currency, M2 is generally considered to be less liquid than M1. This is because M2 includes assets such as time deposits and money market mutual funds, which have longer maturities and may have restrictions on immediate withdrawal. Therefore, statement 3 is correct.
Conclusion:
From the analysis above, we can conclude that statements 1, 2, and 3 are all correct. Therefore, the correct option is C) 2 only.
Money supply refers to the total amount of money available in the economy at a given point in time. It is measured over a specific period, usually a year, and is considered a flow variable. This means that it represents the rate at which money is being supplied to the economy. Therefore, statement 1 is correct.
Statement 2: Interbank deposits, which one commercial bank deposits in another bank, are not included in the money supply.
Interbank deposits are funds that one commercial bank deposits in another bank. These deposits are not considered part of the money supply because they do not directly affect the money available to the general public. Interbank deposits represent liabilities of commercial banks and are primarily used for settlement purposes between banks. Therefore, statement 2 is correct.
Statement 3: M1 and M2 are called broad money and are the least liquid of all.
M1 and M2 are measures of money supply used by central banks to track and analyze the money available in the economy. M1 includes currency in circulation, demand deposits, and other liquid assets. M2, on the other hand, includes M1 plus time deposits, savings deposits, and money market mutual funds.
While both M1 and M2 can be considered "broad money" as they include a wider range of assets than just currency, M2 is generally considered to be less liquid than M1. This is because M2 includes assets such as time deposits and money market mutual funds, which have longer maturities and may have restrictions on immediate withdrawal. Therefore, statement 3 is correct.
Conclusion:
From the analysis above, we can conclude that statements 1, 2, and 3 are all correct. Therefore, the correct option is C) 2 only.
The base year to calculate CPI-AL is- a)1980-81
- b)1986-87
- c)2001-02
- d)2003-04
Correct answer is option 'B'. Can you explain this answer?
The base year to calculate CPI-AL is
a)
1980-81
b)
1986-87
c)
2001-02
d)
2003-04
|
|
Nilanjan Banerjee answered |
The base year to calculate CPI-AL is 1986-87 and 260 items are included in the index.
Consider the following statements and identify the right ones.
i. Government can reduce indirect taxes to control inflation
ii. There is trade-off between growth and inflation in India- a)i only
- b)ii only
- c)both
- d)none
Correct answer is option 'C'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. Government can reduce indirect taxes to control inflation
ii. There is trade-off between growth and inflation in India
i. Government can reduce indirect taxes to control inflation
ii. There is trade-off between growth and inflation in India
a)
i only
b)
ii only
c)
both
d)
none
|
|
Pankaj Kumar answered |
Growth cannot be sustained in inflationary situation for a long time and inflation is bound to be high with high growth rates.
Which of the following banks were nationalized in 1980?- a)Andhra Bank
- b)Vijaya Bank
- c)Corporation Bank
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following banks were nationalized in 1980?
a)
Andhra Bank
b)
Vijaya Bank
c)
Corporation Bank
d)
All the above
|
|
Deepak Verma answered |
The other 3 banks are Punjab and Sind Bank, New bank of India and Oriental Bank of Commerce.
Consider the following statements and identify the right ones.
i. RBI has the sole right to issue currency notes
ii. Minimum reserve system has been replaced by proportional reserve system
- a)i only
- b)ii only
- c)both
- d)none
Correct answer is option 'A'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. RBI has the sole right to issue currency notes
ii. Minimum reserve system has been replaced by proportional reserve system
i. RBI has the sole right to issue currency notes
ii. Minimum reserve system has been replaced by proportional reserve system
a)
i only
b)
ii only
c)
both
d)
none
|
|
Baishali Choudhury answered |
Proportional reserve system has been replaced by minimum reserve system.
Which of the following is an effect of inflation?- a)Erosion in purchasing power
- b)Affects relative price of goods
- c)Increase in inequalities of income
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following is an effect of inflation?
a)
Erosion in purchasing power
b)
Affects relative price of goods
c)
Increase in inequalities of income
d)
All the above
|
|
Anjali Tiwari answered |
Effects of Inflation
Inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. It has several effects on the economy and people's lives.
Erosion in Purchasing Power
One of the significant effects of inflation is the erosion of purchasing power. When the prices of goods and services increase, the same amount of money can buy fewer goods and services. It means that people need to spend more money to maintain their standard of living. Inflation reduces the value of money, and people's savings and investments lose their purchasing power.
Affects Relative Price of Goods
Inflation also affects the relative prices of goods and services. When the prices of some goods and services increase at a faster rate than others, it leads to a shift in demand and supply. The goods and services whose prices are increasing faster become relatively more expensive than others, and people start buying other cheaper substitutes. This shift in demand and supply can lead to a change in the structure of the economy.
Increase in Inequalities of Income
Inflation can also contribute to income inequality. When prices increase, the people who are on fixed incomes such as pensioners, retirees, and low-wage earners are hit the hardest. They cannot afford to buy the same amount of goods and services as before, and their standard of living declines. On the other hand, people with higher incomes can maintain their standard of living by spending more money.
Conclusion
Inflation has several effects on the economy and people's lives. It reduces the purchasing power of money, affects the relative prices of goods and services, and contributes to income inequality. It is essential to control inflation to maintain economic stability and ensure that people's standard of living does not decline.
Inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. It has several effects on the economy and people's lives.
Erosion in Purchasing Power
One of the significant effects of inflation is the erosion of purchasing power. When the prices of goods and services increase, the same amount of money can buy fewer goods and services. It means that people need to spend more money to maintain their standard of living. Inflation reduces the value of money, and people's savings and investments lose their purchasing power.
Affects Relative Price of Goods
Inflation also affects the relative prices of goods and services. When the prices of some goods and services increase at a faster rate than others, it leads to a shift in demand and supply. The goods and services whose prices are increasing faster become relatively more expensive than others, and people start buying other cheaper substitutes. This shift in demand and supply can lead to a change in the structure of the economy.
Increase in Inequalities of Income
Inflation can also contribute to income inequality. When prices increase, the people who are on fixed incomes such as pensioners, retirees, and low-wage earners are hit the hardest. They cannot afford to buy the same amount of goods and services as before, and their standard of living declines. On the other hand, people with higher incomes can maintain their standard of living by spending more money.
Conclusion
Inflation has several effects on the economy and people's lives. It reduces the purchasing power of money, affects the relative prices of goods and services, and contributes to income inequality. It is essential to control inflation to maintain economic stability and ensure that people's standard of living does not decline.
Which of the following is not a function of RBI?- a)Banker to government
- b)Regulation of foreign exchange
- c)Collection and publication of data
- d)None of the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following is not a function of RBI?
a)
Banker to government
b)
Regulation of foreign exchange
c)
Collection and publication of data
d)
None of the above
|
|
Swati Das answered |
RBI performs central banking functions as well as development and promotional functions.
Consider the following statements and identify the right ones.
i. RBI provides advice in all monetary matters except agriculture and industrial finance.
ii. RBI is obliged to transact business of central government and state governments excluding J&K
- a)i only
- b)ii only
- c)both
- d)none
Correct answer is option 'D'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. RBI provides advice in all monetary matters except agriculture and industrial finance.
ii. RBI is obliged to transact business of central government and state governments excluding J&K
i. RBI provides advice in all monetary matters except agriculture and industrial finance.
ii. RBI is obliged to transact business of central government and state governments excluding J&K
a)
i only
b)
ii only
c)
both
d)
none
|
|
Rahul Menon answered |
RBI provides advice in all monetary matters including agriculture and industrial finance. RBI is obliged to transact business of central government and state governments including J&K.
The percentage of demand and time liabilities that banks have to keep with RBI is- a)SLR
- b)CRR
- c)OMO
- d)Bank rate
Correct answer is option 'B'. Can you explain this answer?
The percentage of demand and time liabilities that banks have to keep with RBI is
a)
SLR
b)
CRR
c)
OMO
d)
Bank rate
|
|
Anjana Sharma answered |
Explanation:
The percentage of demand and time liabilities that banks have to keep with the Reserve Bank of India (RBI) is known as the Cash Reserve Ratio (CRR).
Cash Reserve Ratio (CRR):
- The CRR is a monetary policy tool used by the RBI to control the liquidity in the economy.
- It refers to the portion of bank deposits that banks are required to keep with the RBI in the form of cash reserves.
- The CRR is determined as a percentage of the bank's net demand and time liabilities (NDTL).
- NDTL refers to the total demand and time liabilities of a bank, which includes the total deposits held by the bank.
- The CRR is applicable to both scheduled commercial banks and cooperative banks.
Impact of CRR:
- By increasing the CRR, the RBI reduces the liquidity in the banking system as banks have to keep a higher portion of their deposits with the RBI.
- On the other hand, by decreasing the CRR, the RBI increases the liquidity in the banking system as banks have more funds available for lending and investment.
Significance of CRR:
- The CRR serves as a tool for the RBI to control inflation and money supply in the economy.
- By increasing the CRR, the RBI reduces the excess liquidity in the economy, which helps in controlling inflation.
- Additionally, the CRR helps in maintaining the stability of the banking system by ensuring that banks have a certain amount of funds readily available in the form of cash reserves.
Difference between CRR and SLR:
- SLR stands for Statutory Liquidity Ratio, which is the percentage of NDTL that banks have to maintain in the form of specified liquid assets such as cash, gold, and government securities.
- While both CRR and SLR are tools used by the RBI to control liquidity, the key difference is that the CRR is in the form of cash reserves held with the RBI, whereas the SLR is in the form of liquid assets held by the banks themselves.
In conclusion, the correct answer to the question is option 'B', CRR. The CRR refers to the percentage of demand and time liabilities that banks have to keep with the RBI in the form of cash reserves. It is an important tool used by the RBI to control liquidity in the banking system and maintain stability in the economy.
The percentage of demand and time liabilities that banks have to keep with the Reserve Bank of India (RBI) is known as the Cash Reserve Ratio (CRR).
Cash Reserve Ratio (CRR):
- The CRR is a monetary policy tool used by the RBI to control the liquidity in the economy.
- It refers to the portion of bank deposits that banks are required to keep with the RBI in the form of cash reserves.
- The CRR is determined as a percentage of the bank's net demand and time liabilities (NDTL).
- NDTL refers to the total demand and time liabilities of a bank, which includes the total deposits held by the bank.
- The CRR is applicable to both scheduled commercial banks and cooperative banks.
Impact of CRR:
- By increasing the CRR, the RBI reduces the liquidity in the banking system as banks have to keep a higher portion of their deposits with the RBI.
- On the other hand, by decreasing the CRR, the RBI increases the liquidity in the banking system as banks have more funds available for lending and investment.
Significance of CRR:
- The CRR serves as a tool for the RBI to control inflation and money supply in the economy.
- By increasing the CRR, the RBI reduces the excess liquidity in the economy, which helps in controlling inflation.
- Additionally, the CRR helps in maintaining the stability of the banking system by ensuring that banks have a certain amount of funds readily available in the form of cash reserves.
Difference between CRR and SLR:
- SLR stands for Statutory Liquidity Ratio, which is the percentage of NDTL that banks have to maintain in the form of specified liquid assets such as cash, gold, and government securities.
- While both CRR and SLR are tools used by the RBI to control liquidity, the key difference is that the CRR is in the form of cash reserves held with the RBI, whereas the SLR is in the form of liquid assets held by the banks themselves.
In conclusion, the correct answer to the question is option 'B', CRR. The CRR refers to the percentage of demand and time liabilities that banks have to keep with the RBI in the form of cash reserves. It is an important tool used by the RBI to control liquidity in the banking system and maintain stability in the economy.
Consider the following statements and identify the right ones.
i. Data on Mo are published on monthly basis
ii. Data on M1 and M3 are available on weekly basis- a)I only
- b)ii only
- c)both
- d)none
Correct answer is option 'D'. Can you explain this answer?
Consider the following statements and identify the right ones.
i. Data on Mo are published on monthly basis
ii. Data on M1 and M3 are available on weekly basis
i. Data on Mo are published on monthly basis
ii. Data on M1 and M3 are available on weekly basis
a)
I only
b)
ii only
c)
both
d)
none
|
|
Pranab Majumdar answered |
Data on Mo are published by the RBI on weekly basis and Data on M1 and M3 are available on fortnightly basis.
Which of the following banks were nationalized in 1980?- a)Andhra Bank
- b)Vijaya Bank
- c)Corporation Bank
- d)All the above
Correct answer is option 'D'. Can you explain this answer?
Which of the following banks were nationalized in 1980?
a)
Andhra Bank
b)
Vijaya Bank
c)
Corporation Bank
d)
All the above
|
|
Shanaya Bajaj answered |
The other 3 banks are Punjab and Sind Bank, New bank of India and Oriental Bank of Commerce.
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