All Exams >
BPSC (Bihar) >
Indian Economy for State PSC Exams >
All Questions
All questions of Money and Banking 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
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 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 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
|
Vedant Bandgar answered |
Is Taking a loan or debt from RBI capital or revenue recipient
Because RBI gives loans to the Central Government against G-Sec which is an asset for RBI and a liability to the Central then how is the revenue receipt
Can anyone explain here
Because RBI gives loans to the Central Government against G-Sec which is an asset for RBI and a liability to the Central then how is the revenue receipt
Can anyone explain here
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 pairs:1. Repo rate : Policy rate set by the central bank2. 91-day Treasury Bill yield : Long-term government security yield3. 182-day Treasury Bill yield : Short-term government security yield4. Basel III norms : Prudential regulatory framework for banksHow many pairs given above are correctly matched?- a)Only one pair
- b)Only two pairs
- c)Only three pairs
- d)All four pairs
Correct answer is option 'C'. Can you explain this answer?
Consider the following pairs:
1. Repo rate : Policy rate set by the central bank
2. 91-day Treasury Bill yield : Long-term government security yield
3. 182-day Treasury Bill yield : Short-term government security yield
4. Basel III norms : Prudential regulatory framework for banks
How many pairs given above are correctly matched?
a)
Only one pair
b)
Only two pairs
c)
Only three pairs
d)
All four pairs
|
|
Rashi Mukherjee answered |
Understanding the Pairs
Let’s evaluate each pair to determine how many are correctly matched.
1. Repo rate : Policy rate set by the central bank
- This pair is correctly matched.
- The repo rate is indeed the rate at which the central bank lends money to commercial banks, acting as a key tool for monetary policy.
2. 91-day Treasury Bill yield : Long-term government security yield
- This pair is incorrectly matched.
- A 91-day Treasury Bill is a short-term security, typically issued for 3 months, which means its yield is associated with short-term financing rather than long-term.
3. 182-day Treasury Bill yield : Short-term government security yield
- This pair is correctly matched.
- Similar to the 91-day Treasury Bill, a 182-day Treasury Bill is also a short-term security, making this pair accurate.
4. Basel III norms : Prudential regulatory framework for banks
- This pair is correctly matched.
- Basel III is indeed a global regulatory framework established to strengthen bank capital requirements and promote financial stability.
Conclusion: Count of Correct Matches
- Correct matches: 1 (Repo rate) + 1 (182-day Treasury Bill yield) + 1 (Basel III norms) = 3 pairs.
- Incorrect match: 2 (91-day Treasury Bill yield).
Thus, the correct answer is that only three pairs are correctly matched, making option 'C' the right choice.
Let’s evaluate each pair to determine how many are correctly matched.
1. Repo rate : Policy rate set by the central bank
- This pair is correctly matched.
- The repo rate is indeed the rate at which the central bank lends money to commercial banks, acting as a key tool for monetary policy.
2. 91-day Treasury Bill yield : Long-term government security yield
- This pair is incorrectly matched.
- A 91-day Treasury Bill is a short-term security, typically issued for 3 months, which means its yield is associated with short-term financing rather than long-term.
3. 182-day Treasury Bill yield : Short-term government security yield
- This pair is correctly matched.
- Similar to the 91-day Treasury Bill, a 182-day Treasury Bill is also a short-term security, making this pair accurate.
4. Basel III norms : Prudential regulatory framework for banks
- This pair is correctly matched.
- Basel III is indeed a global regulatory framework established to strengthen bank capital requirements and promote financial stability.
Conclusion: Count of Correct Matches
- Correct matches: 1 (Repo rate) + 1 (182-day Treasury Bill yield) + 1 (Basel III norms) = 3 pairs.
- Incorrect match: 2 (91-day Treasury Bill yield).
Thus, the correct answer is that only three pairs are correctly matched, making option 'C' the right choice.
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.
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 only
- b)2 only
- c)1 and 2 both
- 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 only
b)
2 only
c)
1 and 2 both
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 False: 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 Statement 1 is correct.
Statement 2 is False: 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 Statement 1 is correct.
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 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.
What does the Cash Reserve Ratio (CRR) mandate for banks in India?- a)Maintaining a part of total deposits with themselves in liquid assets
- b)Maintaining a part of total deposits with the RBI in cash form
- c)Paying banks an interest income by the RBI
- d)Allowing banks to lend more without any reserve requirements
Correct answer is option 'B'. Can you explain this answer?
What does the Cash Reserve Ratio (CRR) mandate for banks in India?
a)
Maintaining a part of total deposits with themselves in liquid assets
b)
Maintaining a part of total deposits with the RBI in cash form
c)
Paying banks an interest income by the RBI
d)
Allowing banks to lend more without any reserve requirements
|
Mrinalini Roy answered |
Understanding Cash Reserve Ratio (CRR)
The Cash Reserve Ratio (CRR) is a crucial monetary policy tool used by the Reserve Bank of India (RBI) to regulate the amount of funds that banks must hold as reserves.
CRR Mandate for Banks
- The CRR mandates that banks in India must maintain a certain percentage of their total deposits with the RBI in cash form.
- This requirement is significant as it ensures the liquidity and stability of the banking system, allowing the RBI to control inflation and ensure financial discipline among banks.
Purpose of Maintaining CRR
- Liquidity Management: By requiring banks to hold a portion of their deposits as reserves, the RBI can manage the liquidity in the economy effectively.
- Control of Inflation: A higher CRR reduces the amount of money banks can lend, which can help in controlling inflation.
- Financial Stability: This requirement acts as a safeguard against bank runs and ensures that banks have sufficient funds available to meet withdrawal demands.
Impact on Banking Operations
- Banks cannot utilize the money held as CRR for lending or investment purposes, which directly impacts their ability to generate income.
- However, maintaining CRR is crucial for building trust and ensuring that banks are functioning within regulatory frameworks.
In summary, option 'B' is correct as it accurately describes the requirement for banks to maintain a part of their total deposits with the RBI in cash form, which is essential for the overall health of the financial system in India.
The Cash Reserve Ratio (CRR) is a crucial monetary policy tool used by the Reserve Bank of India (RBI) to regulate the amount of funds that banks must hold as reserves.
CRR Mandate for Banks
- The CRR mandates that banks in India must maintain a certain percentage of their total deposits with the RBI in cash form.
- This requirement is significant as it ensures the liquidity and stability of the banking system, allowing the RBI to control inflation and ensure financial discipline among banks.
Purpose of Maintaining CRR
- Liquidity Management: By requiring banks to hold a portion of their deposits as reserves, the RBI can manage the liquidity in the economy effectively.
- Control of Inflation: A higher CRR reduces the amount of money banks can lend, which can help in controlling inflation.
- Financial Stability: This requirement acts as a safeguard against bank runs and ensures that banks have sufficient funds available to meet withdrawal demands.
Impact on Banking Operations
- Banks cannot utilize the money held as CRR for lending or investment purposes, which directly impacts their ability to generate income.
- However, maintaining CRR is crucial for building trust and ensuring that banks are functioning within regulatory frameworks.
In summary, option 'B' is correct as it accurately describes the requirement for banks to maintain a part of their total deposits with the RBI in cash form, which is essential for the overall health of the financial system in India.
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.
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 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
|
|
Ritika Choudhury answered |
Fiscal policy relates to government spending and taxation. Repo rate does come under fiscal measures. It is a monetary policy tool
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 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 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.
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.
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.
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 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.
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
|
|
Abhijeet Shah answered |
Tools used by RBI to maintain money supply in the economy:
Statutory Liquidity Ratio:
- Statutory Liquidity Ratio (SLR) is the percentage of Net Demand and Time Liabilities (NDTL) that banks are required to maintain in the form of liquid assets like cash, gold, or securities.
- By changing the SLR, RBI can control the liquidity in the banking system. If the SLR is increased, banks have to hold more reserves, reducing the amount available for lending and vice versa.
Repo Rate:
- Repo Rate is the rate at which the central bank (RBI) lends money to commercial banks in case of any shortfall of funds.
- By changing the repo rate, RBI can influence the lending capacity of banks. A decrease in the repo rate encourages banks to borrow more from RBI, increasing liquidity in the system.
Bank Rate:
- Bank Rate is the rate at which the central bank (RBI) lends money to commercial banks for long-term funds.
- By changing the bank rate, RBI can control the cost of borrowing for banks, affecting their lending rates and ultimately impacting the money supply in the economy.
Conclusion:
- All three tools, namely Statutory Liquidity Ratio, Repo Rate, and Bank Rate, are used by RBI to maintain money supply in the economy. Each tool plays a crucial role in regulating liquidity and credit flow in the financial system, thereby influencing economic growth and stability.
Statutory Liquidity Ratio:
- Statutory Liquidity Ratio (SLR) is the percentage of Net Demand and Time Liabilities (NDTL) that banks are required to maintain in the form of liquid assets like cash, gold, or securities.
- By changing the SLR, RBI can control the liquidity in the banking system. If the SLR is increased, banks have to hold more reserves, reducing the amount available for lending and vice versa.
Repo Rate:
- Repo Rate is the rate at which the central bank (RBI) lends money to commercial banks in case of any shortfall of funds.
- By changing the repo rate, RBI can influence the lending capacity of banks. A decrease in the repo rate encourages banks to borrow more from RBI, increasing liquidity in the system.
Bank Rate:
- Bank Rate is the rate at which the central bank (RBI) lends money to commercial banks for long-term funds.
- By changing the bank rate, RBI can control the cost of borrowing for banks, affecting their lending rates and ultimately impacting the money supply in the economy.
Conclusion:
- All three tools, namely Statutory Liquidity Ratio, Repo Rate, and Bank Rate, are used by RBI to maintain money supply in the economy. Each tool plays a crucial role in regulating liquidity and credit flow in the financial system, thereby influencing economic growth and stability.
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 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
|
|
Jay Pillai answered |
Explanation:
The Monetary Policy Committee (MPC) is a committee constituted by the Reserve Bank of India (RBI) under the provisions of the Reserve Bank of India Act, 1934. The MPC is responsible for determining the policy interest rate and taking decisions related to monetary policy in India. Let's evaluate each statement given in the question:
Statement 1: Its members are appointed by the President on the recommendations of the Central Government.
- This statement is incorrect. The members of the MPC are not appointed by the President. They are appointed by the Central Government.
Statement 2: Its core mandate is to fix the benchmark policy interest rate to contain inflation within the target level.
- This statement is correct. The core mandate of the MPC is to maintain price stability and keep inflation within a target level. The benchmark policy interest rate, also known as the repo rate, is one of the tools used by the MPC to achieve this objective.
Statement 3: It is headed by the Governor of RBI.
- This statement is incorrect. The MPC is not headed by the Governor of RBI. The Governor of RBI is a member of the MPC, but the committee is actually headed by a Chairperson who is elected by the members of the committee.
Therefore, the correct answer is option 'B' - 2 and 3 only. The members of the MPC are appointed by the Central Government, not the President. The core mandate of the MPC is to fix the benchmark policy interest rate to contain inflation within the target level. And, the MPC is headed by a Chairperson, not the Governor of RBI.
The Monetary Policy Committee (MPC) is a committee constituted by the Reserve Bank of India (RBI) under the provisions of the Reserve Bank of India Act, 1934. The MPC is responsible for determining the policy interest rate and taking decisions related to monetary policy in India. Let's evaluate each statement given in the question:
Statement 1: Its members are appointed by the President on the recommendations of the Central Government.
- This statement is incorrect. The members of the MPC are not appointed by the President. They are appointed by the Central Government.
Statement 2: Its core mandate is to fix the benchmark policy interest rate to contain inflation within the target level.
- This statement is correct. The core mandate of the MPC is to maintain price stability and keep inflation within a target level. The benchmark policy interest rate, also known as the repo rate, is one of the tools used by the MPC to achieve this objective.
Statement 3: It is headed by the Governor of RBI.
- This statement is incorrect. The MPC is not headed by the Governor of RBI. The Governor of RBI is a member of the MPC, but the committee is actually headed by a Chairperson who is elected by the members of the committee.
Therefore, the correct answer is option 'B' - 2 and 3 only. The members of the MPC are appointed by the Central Government, not the President. The core mandate of the MPC is to fix the benchmark policy interest rate to contain inflation within the target level. And, the MPC is headed by a Chairperson, not the Governor of RBI.
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
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.
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.
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.
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.
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
|
|
Amit Kumar answered |
Money supply, like money demand, is a stock variable. Hence, statement 1 is incorrect.
- The total stock of money in circulation among the public at a particular point of time is called money supply. RBI publishes figures for four alternative measures of money supply, viz. M1, M2, M3, and M4.
- The interbank deposits, which a commercial bank holds in other commercial banks, are not to be regarded as part of the money supply. Hence, statement 2 is correct.
- M1 and M2 are known as narrow money. M3 and M4 are known as broad money. Hence, statement 3 is incorrect.
- These gradations are in decreasing order of liquidity. M1 is the most liquid and easiest for transactions whereas M4 is the least liquid of all. M3 is the most commonly used measure of the money supply.
Additional Information
- The measures of money supply in India are classified into four categories M1, M2, M3, and M4 along with M0.
- This classification was introduced in April 1977 by the Reserve Bank of India.
- Reserve Money (M0): It is also known as High-Powered Money, monetary base, base money etc.
- M0 = Currency in Circulation + Bankers’ Deposits with RBI + Other deposits with RBI.
- It is the monetary base of the economy.
- Narrow Money (M1):
- M1 = Currency with public + Demand deposits with the Banking system (current account, saving account) + Other deposits with RBI
- M2 = M1 + Savings deposits of post office savings banks
- Broad Money (M3)
- M3 = M1 + Time deposits with the banking system
- M4 = M3 + All deposits with post office savings banks
- Narrow Money (M1):
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.
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
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.
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
|
|
Jaideep Verma answered |
Concept Explanation:
The concept of Effective Revenue Deficit is used to measure the revenue deficit after deducting grants for the creation of capital assets. It provides a more accurate picture of the revenue deficit by excluding grants that are used for capital expenditures.
Revenue Deficit:
Revenue deficit refers to the excess of revenue expenditure over revenue receipts. It indicates that the government is not able to meet its current expenses through its current revenue sources. Revenue deficit represents the borrowing by the government to finance its current expenses.
Grants for Creation of Capital Assets:
Grants for the creation of capital assets are funds provided by the government for the development of infrastructure and other capital projects. These grants are used for long-term investments and are not considered as revenue expenditure. They are used to create assets that will generate income or provide services in the future.
Effective Revenue Deficit:
Effective revenue deficit is calculated by deducting grants for the creation of capital assets from the revenue deficit. This helps in assessing the true revenue deficit of the government by excluding the capital expenditure component from the revenue deficit.
Example:
Let's consider an example to understand this concept better. Suppose the revenue deficit of the government is Rs. 100 crore and grants for the creation of capital assets are Rs. 50 crore. In this case, the effective revenue deficit would be Rs. 50 crore (Rs. 100 crore - Rs. 50 crore).
Significance:
The concept of effective revenue deficit is important as it provides a more accurate measure of the revenue deficit. It helps in identifying the extent to which the government is relying on borrowings to finance its current expenses, excluding the capital expenditure component. This measure is particularly useful for assessing the sustainability of the government's fiscal position and its impact on the economy.
Conclusion:
In conclusion, the concept of effective revenue deficit is used to measure the revenue deficit after deducting grants for the creation of capital assets. It provides a more accurate picture of the revenue deficit by excluding grants used for capital expenditures. This measure helps in assessing the true revenue deficit and the government's reliance on borrowings to finance its current expenses.
The concept of Effective Revenue Deficit is used to measure the revenue deficit after deducting grants for the creation of capital assets. It provides a more accurate picture of the revenue deficit by excluding grants that are used for capital expenditures.
Revenue Deficit:
Revenue deficit refers to the excess of revenue expenditure over revenue receipts. It indicates that the government is not able to meet its current expenses through its current revenue sources. Revenue deficit represents the borrowing by the government to finance its current expenses.
Grants for Creation of Capital Assets:
Grants for the creation of capital assets are funds provided by the government for the development of infrastructure and other capital projects. These grants are used for long-term investments and are not considered as revenue expenditure. They are used to create assets that will generate income or provide services in the future.
Effective Revenue Deficit:
Effective revenue deficit is calculated by deducting grants for the creation of capital assets from the revenue deficit. This helps in assessing the true revenue deficit of the government by excluding the capital expenditure component from the revenue deficit.
Example:
Let's consider an example to understand this concept better. Suppose the revenue deficit of the government is Rs. 100 crore and grants for the creation of capital assets are Rs. 50 crore. In this case, the effective revenue deficit would be Rs. 50 crore (Rs. 100 crore - Rs. 50 crore).
Significance:
The concept of effective revenue deficit is important as it provides a more accurate measure of the revenue deficit. It helps in identifying the extent to which the government is relying on borrowings to finance its current expenses, excluding the capital expenditure component. This measure is particularly useful for assessing the sustainability of the government's fiscal position and its impact on the economy.
Conclusion:
In conclusion, the concept of effective revenue deficit is used to measure the revenue deficit after deducting grants for the creation of capital assets. It provides a more accurate picture of the revenue deficit by excluding grants used for capital expenditures. This measure helps in assessing the true revenue deficit and the government's reliance on borrowings to finance its current expenses.
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.
Consider the following statements:1. The Monetary Policy Committee (MPC) of India maintained a status quo on the repo rate until January 2022.2. The RBI initiated a monetary tightening cycle in April 2022 due to headline inflation surpassing the upper limit of its tolerance band.3. The Government of India began the banking consolidation process in 1998 following the recommendations of the Narasimham Committee.Which of the statements given above is/are correct?- a)1 Only
- b)1 and 2 Only
- c)2 and 3 Only
- d)1, 2 and 3
Correct answer is option 'B'. Can you explain this answer?
Consider the following statements:
1. The Monetary Policy Committee (MPC) of India maintained a status quo on the repo rate until January 2022.
2. The RBI initiated a monetary tightening cycle in April 2022 due to headline inflation surpassing the upper limit of its tolerance band.
3. The Government of India began the banking consolidation process in 1998 following the recommendations of the Narasimham Committee.
Which of the statements given above is/are correct?
a)
1 Only
b)
1 and 2 Only
c)
2 and 3 Only
d)
1, 2 and 3
|
Kaavya Dey answered |
Analysis of Statements
To determine the correctness of the statements regarding India's monetary policy and banking reforms, let’s analyze each one in detail.
Statement 1: Status Quo on Repo Rate Until January 2022
- This statement is incorrect. The MPC of India actually began increasing the repo rate in May 2022, reacting to rising inflation. Prior to that, the repo rate had been held steady, but it did not maintain a status quo until January 2022.
Statement 2: Monetary Tightening Cycle in April 2022
- This statement is correct. The RBI initiated a monetary tightening cycle in April 2022 as headline inflation crossed the upper limit of its tolerance band (which is typically set at 6%). The MPC raised interest rates to curb inflationary pressures.
Statement 3: Banking Consolidation Process in 1998
- This statement is incorrect. The banking consolidation process in India began following the recommendations of the Narasimham Committee in 1991, not in 1998. The committee laid the groundwork for reforms in the banking sector aimed at enhancing efficiency and stability.
Conclusion
Based on the analysis:
- Correct Statements: Only Statement 2 is accurate.
- Final Answer: The correct option is B) 1 and 2 Only.
To determine the correctness of the statements regarding India's monetary policy and banking reforms, let’s analyze each one in detail.
Statement 1: Status Quo on Repo Rate Until January 2022
- This statement is incorrect. The MPC of India actually began increasing the repo rate in May 2022, reacting to rising inflation. Prior to that, the repo rate had been held steady, but it did not maintain a status quo until January 2022.
Statement 2: Monetary Tightening Cycle in April 2022
- This statement is correct. The RBI initiated a monetary tightening cycle in April 2022 as headline inflation crossed the upper limit of its tolerance band (which is typically set at 6%). The MPC raised interest rates to curb inflationary pressures.
Statement 3: Banking Consolidation Process in 1998
- This statement is incorrect. The banking consolidation process in India began following the recommendations of the Narasimham Committee in 1991, not in 1998. The committee laid the groundwork for reforms in the banking sector aimed at enhancing efficiency and stability.
Conclusion
Based on the analysis:
- Correct Statements: Only Statement 2 is accurate.
- Final Answer: The correct option is B) 1 and 2 Only.
Consider the following statements:Statement-I:
The new Insolvency and Bankruptcy Code, 2016 (IBC) was amended and enforced by the Government in November 2017.Statement-II:
A major factor behind the effectiveness of the new Code has been the adjudication by the Judiciary—it prescribes strict time limits for various procedures under it.Which one of the following is correct in respect of the above statements?- a)a. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
- b)b. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
- c)c. Statement-I is correct, but Statement-II is incorrect
- d)d. Statement-I is incorrect, but Statement-II is correct
Correct answer is option 'B'. Can you explain this answer?
Consider the following statements:
Statement-I:
The new Insolvency and Bankruptcy Code, 2016 (IBC) was amended and enforced by the Government in November 2017.
The new Insolvency and Bankruptcy Code, 2016 (IBC) was amended and enforced by the Government in November 2017.
Statement-II:
A major factor behind the effectiveness of the new Code has been the adjudication by the Judiciary—it prescribes strict time limits for various procedures under it.
A major factor behind the effectiveness of the new Code has been the adjudication by the Judiciary—it prescribes strict time limits for various procedures under it.
Which one of the following is correct in respect of the above statements?
a)
a. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
b)
b. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
c)
c. Statement-I is correct, but Statement-II is incorrect
d)
d. Statement-I is incorrect, but Statement-II is correct
|
T.S Academy answered |
Statement-I is correct as the Insolvency and Bankruptcy Code, 2016 was indeed amended and put into force by the Government in November 2017. Statement-II is also correct as one of the significant factors contributing to the effectiveness of the new Code has been the Judiciary's adjudication, which imposes strict time limits for various procedures. However, Statement-II does not provide an explanation for Statement-I; instead, it highlights another aspect of the effectiveness of the new Code, making option (b) the correct choice.
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
|
|
Amar Menon answered |
As a result of inflation, some sections like producers or big landlords gain due to the ownership of assets, income inequality increases.
With reference to the Government of India, which of the following is a Non Debt Capital Receipt?
1. Recovery of loans.
2. Securities against Public Provident Fund.
3. Disinvestment receipts.
Which of the statements given above is/are Correct?- a)1 and 2 only
- b)2 only
- c)1 and 3 only
- d)1, 2 and 3
Correct answer is option 'C'. Can you explain this answer?
With reference to the Government of India, which of the following is a Non Debt Capital Receipt?
1. Recovery of loans.
2. Securities against Public Provident Fund.
3. Disinvestment receipts.
Which of the statements given above is/are Correct?
1. Recovery of loans.
2. Securities against Public Provident Fund.
3. Disinvestment receipts.
Which of the statements given above is/are Correct?
a)
1 and 2 only
b)
2 only
c)
1 and 3 only
d)
1, 2 and 3
|
|
Ravi Sharma answered |
Non debt receipts are those which does not create debt on the government. Provident funds are liabilities of government and it has to return those money back.
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.
Chapter doubts & questions for Money and Banking - Indian Economy for State PSC Exams 2025 is part of BPSC (Bihar) exam preparation. The chapters have been prepared according to the BPSC (Bihar) exam syllabus. The Chapter doubts & questions, notes, tests & MCQs are made for BPSC (Bihar) 2025 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests here.
Chapter doubts & questions of Money and Banking - Indian Economy for State PSC Exams in English & Hindi are available as part of BPSC (Bihar) exam.
Download more important topics, notes, lectures and mock test series for BPSC (Bihar) Exam by signing up for free.
Indian Economy for State PSC Exams
111 videos|279 docs|114 tests
|
Signup to see your scores go up within 7 days!
Study with 1000+ FREE Docs, Videos & Tests
10M+ students study on EduRev
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup