Banking Sector - Money Supply And Banks - 1


20 Questions MCQ Test Economy Traditional for UPSC (Civil Services) Prelims | Banking Sector - Money Supply And Banks - 1


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QUESTION: 1

Who issues metallic coins in India?

Solution:

The Government of India issues metallic coins in India. Coins, paper currency and deposits are the components of money supply in India.

QUESTION: 2

Which of the following is issued by RBI?

Solution:

Currency notes are issued by RBI. The Government of India issues metallic coins in India.

QUESTION: 3

Consider the following statements and identify the right ones.
i. Deposits are created by banks and financial institutions.
ii. They constitute the major source of money supply in Indi

Solution:

Coins, paper currency and deposits are the components of money supply in India.

QUESTION: 4

Which of the following about money supply measure adopted in 1977 is correct?

Solution:

These are the measures of money supply adopted by RBI in 1977.

QUESTION: 5

Which of the following is most liquid measure of money supply in India?

Solution:

M1= cash with the public+ demand deposits with banks+ other deposits with RBI.

QUESTION: 6

 Which of the following is known as broad money?

Solution:

M3 is known as broad money as more items are included in this measure when compared to M1 which is known as narrow money.

QUESTION: 7

Which of the following about money supply measures adopted in 1998 is wrong?

Solution:

M4= M3+ all deposits with post office savings banks excluding National Savings Certificate.

QUESTION: 8

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

Solution:

Data on Mo are published by the RBI on weekly basis and Data on M1 and M3 are available on fortnightly basis.

QUESTION: 9

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.

Solution:

Data on liquidity aggregates L1 and L2 are published on a monthly basis.

QUESTION: 10

Which of the following banks was not nationalized in 1969?

Solution:

Vijaya Bank was nationalized in 1980 with 5 other banks. In 1969, 14 banks were nationalized.

QUESTION: 11

Which of the following banks were nationalized in 1980?

Solution:

The other 3 banks are Punjab and Sind Bank, New bank of India and Oriental Bank of Commerce.

QUESTION: 12

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.

Solution:

Post nationalization, banks were supposed to open more branches in rural and semi-urban areas in order to collect savings from these areas.

QUESTION: 13

Consider the following statements and identify the right ones.
i. The lead bank scheme owes its origin to Nariman Committee
ii. Under this scheme, SBI and its subsidiaries only were given the responsibility of development of districts

Solution:

Under this scheme, SBI and its subsidiaries, 14 nationalised banks as well as 3 private banks were given the responsibility of development of districts.

QUESTION: 14

Regional Rural Banks work at

Solution:

The SBI and its subsidiaries, 14 nationalised banks as well as 3 private banks were given the responsibility of development of districts.

QUESTION: 15

Which of the following is a subsidiary of SBI?

Solution:

SBI has 5 subsidiaries now. The other 2 are State Bank of Bikaner and Jaipur and State Bank of Travancore.

QUESTION: 16

In 2001, RBI issued a set of guidelines for private sector. Which of the following is true?

Solution:

The paid up capital should be increased to 300 crore rupees in 3 years of operation.

QUESTION: 17

In 2001, RBI issued a set of guidelines for private sector. Which of the following is true?

Solution:

New banks are supposed to keep minimum 10% of CAR from the beginning.

QUESTION: 18

In 2001, RBI issued a set of guidelines for private sector. Accordingly which bank was issued licence?

Solution:

In 2001, RBI issued a set of guidelines for private sector. Accordingly only 2 banks were given licence then- YES Bank and Kotak Mahindra Bank.

QUESTION: 19

Which of the following is a reason for inflation?

Solution:

Inflation refers to rise in the general price level in the economy. Various demand and supply side factors cause inflation.

QUESTION: 20

Which of the following is an effect of inflation?

Solution:

As a result of inflation, some sections like producers or big landlords gain due to the ownership of assets, income inequality increases.

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